Let’s face it, the outlook for 2019 isn’t exactly blazing sunshine. Brexit looms menacingly on the horizon, with the chances of a disorderly ‘no deal’ growing by the day. The EU is weighed down by growing challenges from within, with worrying signs from Italy and Hungary’s harshly anti-migration governments. China faces an economic slump and its trade war with the US could impact heavily on the global economy. These and other factors are no doubt giving many company CEOs sleepless nights.
So, in these uncertain times perhaps it’s not surprising that the demand for flexible workspaces, with month-to-month lets, simple options to expand and upgrade – or contract – plus amenities including cafes, post and front desk services is set to soar across Europe in the next five years, according to property firm Jones Lang Lasalle.
In the early days of flexible working it was freelancers and small companies who forgo long leases and took the plunge. But increasingly large businesses and even global behemoths are getting involved.
Today’s businesses have to be agile to survive, existing in a continual state of transformation which will allow them to react quickly to changes in the market and disruption from new players. Business models evolve, sometimes undergoing radical changes. What’s the point in being locked in to an expensive ‘trophy office’ with a 5 or 10 year lease and no flexibility, if it’s possible that the products you’re selling today will have significantly changed tomorrow, or if the business is likely to shift from product manufacturer to service provider?
Research by Knight Frank published in November 2018 suggests that over two thirds of global corporate businesses plan to increase their use of flexible co-working space over the next three years. 44% of senior executives surveyed at 120 global companies said that flexible space will constitute up to a fifth of all office space in the next three years. An additional 16% believed that over that time frame as much as half of their workspace globally would be flexible space. Dr Lee Elliott, Global Head of Occupier Research at Knight Frank commented: “This research underlines that a decade of global economic uncertainty has reshaped how many of the world’s largest companies view workspace. Shorter business planning horizons, together with the emergence of new, more agile corporate structures has driven demand for flexible space which enables companies to react to change quickly.”
Another crucial factor is the rise of remote working. New technology has given today’s office workers the power to work at home, and the businesses who employ them are more and more inclined to allow it. Businesses keen to attract high-calibre staff are aware that it’s crucial for them to be seen to champion flexibility and show that they value employees who may not spend every day in the office, whether it’s because they’re juggling family life, have a health issue that makes the daily commute arduous, or just prefer to work at the cutting edge of banking from a rural idyll on the edge of Dartmoor. Woe betide the traditional business who seems stuck in their ways if they want to employ the best talent. But this presents a conundrum for businesses. How many desks do you need when a significant number of your workforce may not be in every day? How can you cater every day for changing numbers? When some reports suggest that half the working population could be contractors by 2021, how do you plan for that? Having a workspace that can quickly and easily expand or contract according to business needs is clearly the answer.
The market for flexible working is seeing such a boom that it seems like there’s room for everyone, from big players like IWG, WeWork, ImpactHub and Knotel to smaller, niche operators. Consider London’s well-established flexible workspace market. Nightclub stalwart Ministry of Sound has recently moved into the space, seeing an opportunity to develop more creative spaces. Simon Moore, the group’s creative director commented ‘“We came up with this idea that we call ‘premium raw‘, which is the creative strategy for everything in the building,” says Moore. “It doesn’t matter if it’s a fragrance, interiors, furniture, art, uniforms – everything goes through that filter.” Their new space, The Ministry, speaks to those who value authenticity and character, with the building stripped back to reveal its industrial origins.
Meanwhile, Twickenham Stadium is the unlikely first location for a new flexible workspace brand launched by two former professional rugby players, Matt Hopper and Iain Dickson. Iconic Workspace aims to “create a community where members can experience the true qualities learned only through sport and apply them to their own success stories”. The duo are planning to open in at least 10 sporting venues, with Wembley Stadium next on the horizon and Old Trafford, Murrayfield in Glasgow, Cardiff’s Principality Stadium and racing venue Silverstone all in their sights. Other London offerings include Blooming Founders, a female-focused co-working space including childcare services, The Exchange at Somerset House for entrepreneurs, start-ups and freelancers in the creative industries, and 42 Acres, designed to ‘consciously create space for connection’, offering yoga sessions and meditation and linked to a Somerset wellness retreat.
London and New York’s largest private office occupier is now WeWork, with 45 locations in London alone. In fact, such is the explosion in WeWork offices that if you stand still for more than 5 minutes in Clerkenwell or Shoreditch, somebody will probably hang a WeWork sign on you and be renting you out as a laptop desk before you’ve had time for a micro-roasted coffee. Having borrowed heavily to expand so quickly, it’s easy to speculate they’ve grown too big, too quickly and will end up being one of the casualties if the economy takes a turn for the worse, leaving their steadier, more established competitors to sweep in and clean up.
But in the meantime, it’s a vibrant market for flexible workspaces, with a lot of healthy competition, plenty of room for all, and an economic outlook where it makes sense for more and more businesses to make the shift. And as even the very biggest companies move towards flexible working, there’s no doubt a lot of CEOs out there who are grateful to have one less thing to worry about.
- Commercial real estate
- Shared working spaces
- Collaborative workspaces
- Flexible workspaces