Spanish flex workspace operator Lexington is pausing its expansion plans
Spanish flex workspace operator Lexington Workspaces is pausing its expansion plans.
Apart from the opening of a new center in Malaga in 2025, the company has no other projects in the pipeline, according to David Vega, CEO of Lexington, which operates five locations in Madrid and two in Barcelona.
In truth, “Lexington’s growth is slowing down”, reports an article in EJEPrime. “After growing by 23% in 2023, this year the company expects a 6% increase in revenues, reaching €13.8 million, below the €14 million forecast at the beginning of the year due to a weak first half.” In 2025, the company expects revenues to reach €15 million.
“Inflation has significantly affected the income statement and commercial margins. For instance, the capital expenses (materials, labor, and other costs) to set up our latest office in Madrid have increased by almost 40% compared to a similar opening in 2022, explains David Vega. Additionally, remote working has left hundreds of thousands of square meters of office space unused. Prices have dropped, and there has been considerable repurposing of office spaces for residential, retail, or other uses.”
All of these factors impact the demand for coworking spaces. According to Vega, flex and coworking spaces currently represent 2.3% of office stock in Madrid and 3.2% in Barcelona. It is still a ‘residual’ segment, and Spain has a long way to go before reaching the 7% in London or 8% in Amsterdam. Market consolidation is also expected. ‘We are approaching this point,’ he adds.
