A tour of London’s co-working spaces

“OK, I have a question,” says WeWork’s head of brand Europe, flicking her freshly washed, post-workout hair over one shoulder. “What would you do, if you were given the opportunity to get on a spaceship and be part of setting up a new community on the moon?” I imagine there are probably a lot of these kind of conversations at WeWork, the workspace provider with a global valuation of $16bn (£13.2bn) and plans to double the size of its 11-building London occupancy by the end of next year. Hillary Deppeler astutely brings the conversation around to how life is all about networks and pushing boundaries, until we are seamlessly right back on WeWork’s collaborative brand message. She is displaying the “super-social” quality required for being one of the community managers assigned to each floor to connect people with crossover interests and come up with perpetual fun and friendly conversation starters. The growing co-working market suggests I could be bearing witness to a futuristic vision of office life, one where “Wellness Wednesdays” and free beer on tap are de rigueur (as at WeWork). Where your workspace brand becomes part of your identity, you go on summer camp with fellow members, and are sort of always at work but sort of always not. It certainly beats being a start-up alone with a laptop in a soulless serviced office. And for small businesses it is a huge opportunity to meet like-minded people through networking events, skills sharing and a members-only app that is like a social media hook-up site for entrepreneurs. Three months later I spend the day in WeWork Moorgate at 1 Fore Street, EC2, in the same week as the building is sold by Brookfield to Hong Kong-listed company Kingboard Chemical Holdings for £271m. The price reflects a net initial yield of 4.86% and has caused nodding investors to affirm the “strength of the WeWork leasing covenant”. Nick Jacobs, chief executive of Rowan Asset Management, which leased 62,000 sq ft to WeWork at Aldwych House, WC2, in conjunction with GI Partners in September, says: “It is clearly an investment-grade covenant. It is a global brand leader and miles ahead of the opposition in its thinking and delivery.” Floor one represents the original co-working concept, with a table tennis table I see being used in the afternoon. The upper levels are closer to WeWork 2.0 with a mixture of co-working space and dedicated office space for divisions of large corporates, such as Skyscanner, which are increasingly looking to gain access to creative co-working environments with their millennial members. London has almost 800 co-working spaces, which are growing at a rate of 10% a year, according to Cushman & Wakefield. The Office Group now occupies more than 1m sq ft across its 33 buildings. TOG chief executive and co-founder Olly Olsen says he is confident that the flexible workspace trend is not a bubble about to burst. “For a lot of reasons I believe that this flexible way of working is absolutely more than here to stay, it is ascending and is growing by the square foot across the planet.” He admits there are “a lot of people entering the market very quickly”, but says that will balance itself out. “Some are going to want to go to me, some are going to want to go to the others. A little bit like a gym, there are different gyms for different people, different price points, and that will balance itself out,” he says. Olsen recognises that the uptake from SMEs and entrepreneurs is in danger of falling in a downturn. However, he says pure co-working space makes up just 1% of TOG’s revenue and about 3-4% of its workspace. Most of the 3,000 enquiries the company receives every month come from well-known businesses. “Some of these big tech companies, the biggest names around, are coming to the UK and needing space, or they are moving away from their long lease right now because they don’t know whether they are going to need 200, 300 or 400 sq ft, so they are moving in and taking space with us,” says Olsen. Brexit uncertainty means this demand is likely to increase, and a post-referendum spike in demand was cited by Queensgate Investments as a reason for its decision this autumn to consider marketing serviced offices business London Executive Offices, which runs 33 sites in London. It looks like co-working is here to stay. Co-working working I spend the day in The Office Group’s Henry Wood House, W1. Typical of TOG locations, the building has a ground-floor café with workspace for “lounge members”, with upper floors dedicated to a mixture of co-working areas and designated offices. While the private rooms used to be the most popular, chief executive and co-founder Olly Olsen says companies now see the value in being linked to the co-working areas, where interactions and ideas can flow. Wellbeing is high on the agenda at TOG too, in response to what Olsen sees as an increasing demand from the millennial generation of employees. I take part in a high-intensity workout at TOG’s Work It gym with four other 20-somethings. My muscles ache for the rest of the week. Lunch is grilled salmon and salad, a menu devised by an in-house nutritionist. If TOG’s aim is to appeal to a wide audience, the latest trend in serviced offices appears to be niche specialisms. As close as I get to this is Soho Works, the flexible workspace offshoot of Soho House, which has just one location at East London’s Tea Building, E1, but plans to open more sites in London next year before expanding in the US. Like Soho House, which requires you to demonstrate your creative and media credentials before joining its exclusive membership, Soho Works is designed for people working in those industries, with a cosy living room area to help facilitate a nurturing creative network. It hosts weekly socials, talks from inspirational businesses, and has an art room with important architecture equipment such as 3D printers, but also space to just pull out a canvas and let go. However, I am told it is not used as much as the managers would like it to be. The serviced office phenomenon has certainly come a long way from its original concept. Regus, the largest listed player, with a market capitalisation of £2.5bn, is often cited as the early adopter with a more traditional serviced offices offering. Its take-up now extends to 50m sq ft globally, following a 20% expansion in the past 18 months. You are now never more than 50m away from a Regus office in central London and the company is expanding its regional presence too. “We just have a lot of faith in the fact that the way in which companies fund and use office space is changing and that change is linked to businesses wanting to be more flexible,” says Regus UK chief executive Richard Morris. “I believe the concept of long terms of lease on office space is now obsolete in today’s way of working.” I walk around one of Regus’s more traditional serviced office spaces at Rex House, SW1. Small companies, which pay per square metre, have crammed as many desks as possible into a warm nondescript room. It doesn’t inspire much, but it clearly serves a purpose. Now Regus is responding to the perceived millennial trend with its new brand, Spaces, designed to target media, digital and creative companies. Morris says that more than 50% of its new offices will be Spaces. I walk around one at Mappin House, W1, which has the usual breakout areas, library and phone booths for taking private calls. After three days camping out at co-working spaces, they all start to look a little bit the same. The phone booths, the jar of sweets in the meeting room, the citrus fruit-flavoured tap water. At 3pm sitting in WeWork Moorgate, I give up and go back to my familiar office to get some work done. Flexible office space is meeting a growing demand. But flexibility is what it comes down to. Beyond that, extras are important. But for day-to-day working life, it is just about having a comfortable place to work with good WiFi and a laptop where you can make things happen, whether you are aiming for the moon or not. How they compare The Office Group, Henry Wood House, 2 Riding House Street, W1 Landlord: Derwent London Size: 70,000 sq ft Quirky features: Jars of sweets in meeting rooms, art made by members, Work It fitness studio gym classes Cost of a flat white: £2.25 Company motto: Whatever your goals, you can achieve them here – and you can find collaborators to help you Cost: From £50 per month for drop-in workspace; £300 per month for a hotdesk, £450 per month for a dedicated desk; price on request for a dedicated office WeWork Moorgate, 1 Fore Street, EC2 Landlord: Kingboard Chemical Holdings Size: 160,000 sq ft Members: 3,100 Quirky features: Beer on tap, table tennis tables, dog-friendly policy Cost of a flat white: Free from machine for all members Company motto: WeWork’s mission is to create a world where people work to make a life, not just a living Cost: Hotdesk starts at £250 per month; dedicated desk from £325 per month; private office from £660 per month Soho Works, East London Tea Building, 56 Shoreditch High Street, E1 Landlord: Derwent London Size: 16,000 sq ft Quirky features: Art room with canvases and a 3D printer, chill-out library, vintage lighting and retro drinking fountains Cost of a flat white: Free Nespresso pods or £2 from a barista Company motto: An international network of around-the-clock workspaces from Soho House & Co, designed and equipped to support a membership of individuals and businesses in the creative industries Cost: Monthly rates start at £200 for Soho House members and £400 for the public; its 23 offices accommodating between one and 10 people prices start at £825 per person for non-members Regus, News Building, 3 London Bridge Street, SE1 Landlord: Sublet from Rupert Murdoch’s News UK Size: 31,000 sq ft Workstations: 340 Quirky features: Community “market” for snacks Cost of a flat white: £1 for a Nespresso pod Company motto: Flexible workspace from an hour to a day, to as many years as needed – made simple with all-inclusive pricing Cost: Lounge membership starts at £49 per month; co-working space from £649 (unlimited UK access); flexible office from £549 (unlimited London access) • To send feedback, e-mail louisa.clarence-smith@estatesgazette.com or tweet @LouisaClarence or @estatesgazette