Start-up shared office space company Knotel is looking to extend its footprint in London. The company believes its business model can thrive in the U.K.’s uncertain real estate market as Brexit approaches, according to The Wall Street Journal.
Knotel, which is making long-term leases a thing of the past with its Agile HQ™ Platform, has more than 60 flexible office space locations that comprise more than 1 million square feet in New York, San Francisco, London and Berlin. The company has raised more than $100 million in funding since it was founded in 2016. Knotel’s member network includes Starbucks, Cheddar, Stash and King.
Knotel is based in New York and is seen as one of flexible office space giant WeWork Cos.’ biggest challengers. Like WeWork, Knotel signs deals with office landlords, and leases office space to tenants that want a flexible arrangement. Knotel also finds, customizes and operates its offices for customers so they can focus on their business. The leases are usually short-term and can be changed in days, which is a welcome change to the traditional 10 to 15 year leases that landlords have required from tenants in the past.
A majority of Knotel’s growth during the last couple of years has been in New York and San Francisco, but chief executive Amol Sarva has his sights set on claiming more space in Europe—the U.K. in particular. Knotel signed a deal to open its second location in London last month. It secured 7,800 square feet of space in the central Soho district. Meanwhile, the company said it planned to take on nine more locations in London before the end of October to add to the workspace operator in Berlin it acquired earlier this year.
Sarva has kept a close eye on the U.K as it prepares its exit from the European Union (EU) in March 2019. London’s commercial property had been growing rapidly, but has slowed due to the uncertainty around the U.K.’s future relationship with the EU.
“Everyone has been very guarded in London,” Sarva told The Wall Street Journal. “The real estate people don’t want to confess it, but I have observed for the last 12 months a shadow crash.”
Sarva believes due to the numerous questions surrounding the current market environment, Knotel’s business model is a perfect fit. He stated there’s an increased interest in the company’s product as it provides flexibility during these uncertain times.
“London is already in a downturn, and customers are very eager for our product,” Sarva said.