Increase in profitability and regional demand for flexible workspaces: Report

According to the study, which combines a nationwide FWA member survey with interviews and market analysis, 77 per cent of operators have reported an increase in revenue in the last 12 months, with 60.5 per cent reporting growth in profits.

Further, 70 per cent of respondents expect revenue growth in the coming year, and more than three-quarters expect increased profitability.

“The flexible workspace industry has undergone a period of rapid transformation in the past few years, driven by shifting work preferences, technological advancements and evolving commercial real estate dynamics,” says FWA board member and Spacecubed chief executive Ophelie Cutier.

“Flexible workspaces are no longer just an alternative – they’re now a cornerstone of the modern workplace. As hybrid work reshapes office demand, businesses are turning to flexible spaces for agility, cost efficiency and a strong sense of community.

“This report reveals strong performance across the co-working and flexible workspace industry, suggesting the industry is in good health and a growth phase.”

The report also suggests a significant shift to decentralisation, with nearly half of respondents operating outside capital cities and almost 37 per cent in suburban areas.

These findings highlight a growing demand for tailored workspaces closer to residential areas, and an opportunity for targeted investment in co-working spaces beyond metro hubs.

Small businesses and solo operators continue to make up the bulk of the primary customer base, with corporates and the not-for-profit sector also contributing a significant percentage of users.

There are slight variations from location to location. Sydney and Melbourne see more start-up businesses utilising flexible workspaces, while Brisbane’s industry is fuelled by corporations opening satellite offices.

This latter is highlighted as one of a number of key trends that have significantly impacted the co-working and flexible workspace business in the last five years. Other trends are an increase in remote and hybrid work adoption, demand for flexible lease terms, and expansion into suburban and regional areas.

These factors have no doubt contributed to the strong industry confidence reflected in the report. Current business sentiment is rated an average of 8/10 by respondents, with 85 per cent expecting steady growth over the next five years.

No respondents predicted a decline in the industry.

Of the potential challenges ahead, economic uncertainty, growing occupancy rates and high operating costs were flagged as concerns.

According to the report, the supply of vacant co-working spaces has fallen since Flex Futures 2023. One in four operators increased their total square meterage over the past year, and 31 per cent expect to do the same in the coming year.

Most flexible workspace businesses operate independently or in small networks with spaces under 5000 square metres. A handful of major players maintain broader footprints, which skews the national average.

Workspace operators also report a continued rise in demand for high-quality environments and services, with users prioritising location, price, flexibility and basic amenities like coffee, internet and printing. Natural light, community and networking opportunities and high-end offerings like podcasting and end-of-trip facilities also feature in the top considerations.

“The results reflect a maturing and diverse industry, with operators catering to different market segments across Australia,” Cutier says. “Flexible workspaces are evolving beyond traditional city hubs, with strong demand driving growth in suburban and regional areas. This shift signals a new era for the industry – one that prioritises accessibility, quality and flexibility.

“Additionally, the prevalence of high-rated workspaces indicates that customer expectations for quality and service continue to rise, positioning the flexible workspace sector as a critical component of the evolving work landscape.

“As the Australian flexible workspace sector continues to evolve, operators must balance premium experiences, affordability and location strategy to remain competitive in this rapidly shifting landscape.”

According to Rubberdesk’s Flexible Office Space Report, the price per person per month has undergone sustained growth since 2021, stabilising after reaching a point just above pre-pandemic levels last year.

Offices with a capacity of between 16 and 25 people posted the highest gains since the last benchmark, increasing from $675 to $768 per person.

Sydney rates, however, have risen seven per cent to $1000 per person, while premium locations like Barangaroo in Sydney are now commanding rates of just over $1300 per desk.

The full Flex Futures 2025 report is available here.