Hana treads carefully as flex competition builds
When CBRE announced last September that Hana, its flexible office business, had secured three sites for a London launch, the team could never have known that when those sites opened 10 months later the country would be in the middle of a pandemic.
But in the same way that Hana’s space is designed to help meet occupiers’ rapidly changing needs, the company itself is now adapting to an unexpected event. With the doors open in London, the company is focusing on clients’ back-to-work strategies and how it can help them get workers to their desks.
“It’s been a challenge, but a challenge that we have embraced,” says Paul Nellist, Hana’s managing director for Europe, the Middle East and Africa.
When CBRE announced last September that Hana, its flexible office business, had secured three sites for a London launch, the team could never have known that when those sites opened 10 months later the country would be in the middle of a pandemic.
But in the same way that Hana’s space is designed to help meet occupiers’ rapidly changing needs, the company itself is now adapting to an unexpected event. With the doors open in London, the company is focusing on clients’ back-to-work strategies and how it can help them get workers to their desks.
“It’s been a challenge, but a challenge that we have embraced,” says Paul Nellist, Hana’s managing director for Europe, the Middle East and Africa.
The company remains upbeat on opportunities in the global flexible workspace sector post-Covid-19, with chief executive Andrew Kupiec saying the sector is entering “a next phase of growth”.
Employers want more flexibility from their office portfolio to “ease the burden” of planning for a looming recession, he says. “This is an extremely volatile marketplace where it’s very hard to predict what your headcount will be,” Kupiec adds. “Employees are simultaneously asking for more flexibility too.”
Nonetheless, he says CBRE and Hana are being “smart” about its expansion and growth plans. The company said in a May earnings call that it had “slowed the rate upon which we’re adding new Hanas”, halving its expansion rate from 20 new sites to 10 this year.
With that in mind, Kupiec remains cautious on committing to an exact figure for expansion in 2021. By the end of this year, he says, Hana’s footprint will be just shy of 500,000 sq ft in the UK, which he thinks will double “in a short period of time”. But the business does not want to “build too much, too fast”.
“We have access to plenty of capital, should we want to move faster, but we’re going to watch the reopening of offices very closely and timing will play a big role in that,” Kupiec says.
CBRE has opened its Hana destinations in London at a time when the flex office space sector is more competitive than ever. Fora plans to expand its footprint from 700,000 sq ft to 1.2m sq ft, while Legal & General aims to more than double outlets for its flex office space offering, Capsule, by the end of the year.
How does Hana compete against such aggressive expansion plans? “We’ve got different products and different design philosophies,” Nellist says.
“With the benefit of what we know and the period we have been through, we absolutely do see the demand for flex as being strong both from a London context and a European one as well. Regardless of what deal structure we enter into, the crucial thing for us is to work closely with landlord partners.”
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