COMMENT I was with a building owner recently who was negotiating a partnership with a flexible workspace operator, and they asked: “Am I doing the right thing?” They had looked at the flexible workspace offer already in the market and were worried the market was saturated, which would affect their ability to sell.
These concerns are understandable, and not uncommon in certain locations; the key is to look more closely at the market and what is on offer.
Flexible workspace is like the car market. A street might have 12 car showrooms, but they all offer something different. We all need to get from A to B, but we don’t drive around in the same type of car. There are many different makes and models to choose from, with different engine sizes, numbers of seats, amount of luggage space, specifications, colour schemes and so on. Each serves different needs, tastes and budgets.
And it’s the same with flexible workspace. Flex office products have different levels of hospitality and service, with various price points, looks and brands. There is flexible space that is like a Bugatti and space that is more like a Fiat 500. And everything in between.
Market evolution
The term “flexible workspace” is misleading because it has connotations of one month in, one month out. Instead, it is space as a service delivered on a wide variety of terms.
The market is growing as working practices evolve, which means more varied occupier needs to satisfy. Businesses look for a flex offer that supports their work culture, business strategy and brand.
Some big corporates are forging relationships with specific flex operators because they have a global network of offices, for example. And there are now sector-specific products coming to the market which will purposefully preclude certain occupiers from taking space.
Research by the Instant Group and EG in 2022 showed that it would take only 10% of UK occupiers switching from traditional office leases to flexible workspace to generate a 40m sq ft shortfall in flexible office supply. If you go back eight or 10 years, would anyone have considered such a substantial shift towards flexible workspace feasible? The market has evolved to the extent that it now is.
Even traditionally leased offices have changed in the past few years. It used to be that a Cat A office in the West End and another in the City would have little real difference aside from rent and location. Now there is Cat A-plus.
The choice is yours
All the different flex offers will have a place because they can adapt and reflect the needs of occupiers in a way that the traditional office market has never done before.
It is still important to have the right product, in the right asset, in the right location. There is no point in having a Ferrari showroom in a town where people only drive family estates. But as long as the flex sector keeps developing and adapting, the market will accommodate.
Saturation occurs when the offer is the same or similar. The car market thrives on people having choice, as does the flexible workspace market. There is a lot more choice now, and that needs to be maintained in the future.
Will Kinnear is director at Hewn
Photo © Hewn
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