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The Office Operators: European Workspace Market “Growing Like Wildfire”

byJo Meunier
October 16, 2017
in Business
Reading Time: 6 mins read
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“The [Benelux] market nearly quadrupled in the past couple of years and the number of new brands that came to market is staggering.”

Since co-founding his European serviced office company The Office Operators in 2010, CEO Sipke Feenstra has spent the past 7 years fine-tuning their flexible workspace offering, which is currently centred on Europe’s Benelux region (Belgium, The Netherlands and Luxembourg).

Sipke Feenstra
Sipke Feenstra, co-founder and CEO of The Office Operators.

“2017 has been good to us. This year we opened 9 new locations in three new cities, and we are still discussing another couple of signings this year,” Sipke told Allwork.Space.

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Currently, TOO operates 26 serviced office centres in 10 cities across The Netherlands and Belgium, with further expansion plans in the pipeline. It’s an impressive feat for a company that’s just 7 years old.

The Office Operators was founded in 2010 by Franck Knol and Sipke Feenstra, both ex-Regus employees, and two other shareholders who were later replaced by Andre Verpoorten.

“The reason we started The Office Operators stems from our days at Regus. Both Franck and myself started our serviced office careers at ‘the big brother’ and we have much to thank them for, not least the very thorough education we received across all aspects of our industry.”

In 2010 an opportunity arose to take over an existing operator in The Netherlands, which had been experiencing financial difficulties following the 2008 economic crisis.

“We went for it because we love the product and we have long understood its massive market potential. This operator had 4 locations of which one, the WTC Schiphol Airport, was of particular interest to us — a jewel in the crown, so to say,” Sipke explained.

“We set out to build a networked product and you can’t build a network in The Netherlands without including Schiphol.

“Over the past 7 years we have been building upon the platform of the operator we bought. We closed a number of the less attractive sites and started adding locations to a network that today has 26 locations in 10 cities across 2 countries.”

In addition to adding locations, the group worked on “drastic improvements” including greater cost transparency, adding value for clients and improving the quality of the serviced office product.

With regard to quality, Sipke and his co-founders have a number of very specific requirements they look for in every building. But it must also exude a certain X-factor that can’t always be quantified.

“First question is always; would I want to work here myself?” says Sipke. “If the answer is ‘No’, how can I expect others to enjoy the place?”

Amsterdam-City-Centre-UP
The UP Office Building on the shores of the river IJ in Amsterdam.

“With that, comes all sorts of requirements like location — still very important, size and style of the property, accessibility and amenities.”

Sipke notes that there is always a trade-off, a “well-known battle between efficient use of space and the desire to have ample social space and design elements” in each building.

“We have to create a certain number of sellable workstations from a given area, but at the same time you want to create something that is beautiful and creates a certain WOW! factor. Not always the easiest of tasks but one we are mastering more and more with every new location we open.”

3 Amsterdam Herengracht social
Social space at the Herengracht building in Amsterdam.

TOO works to overcome such challenges by sharing knowledge via their own recruitment and training facility, the TOO Academy. “That’s where we teach our staff all we know and have learned over the years on how to be of the greatest support to our guests.”

The fact that TOO refers to their clients as ‘guests’ is telling of their drive to raise the bar on service; asked what he attributes most to the company’s success, Sipke’s immediate answer is “people, and our non-stop focus on quality and adding value.”

This in itself helped the original company recover and regenerate. “In our search for properties, especially in the early days when we weren’t an established brand, that’s what made us stand out.

“Iconic buildings aren’t always that easy to get, but building owners recognize what we bring to a property and the quality of our product.”

Amsterdam South Axis Infinity
The Office Operators at Infinity, a landmark office building in the South Axis of Amsterdam.

 

As such, TOO is increasingly swaying towards buildings that provide their own built-in amenities. “Most of the latest additions to the TOO network seem to be larger sized multi-tenant properties with lots of facilities, like the WTC Amsterdam or the WTC Utrecht.”

TOO has been helped by a strengthening European market and greater appreciation of flexible workspace.

In June 2017, European brokerage company MatchOffice released its annual industry report and shone the spotlight on Europe’s rapidly growing serviced office sector. Jakob Dalhoff, CEO of MatchOffice, commented on a “buoyant” market that has further built on 2016’s “year of stability and growth”.

He noted that the “popularity of serviced offices continues to grow all over Europe” and in The Netherlands in particular, almost 70% of serviced office operators stated that they feel positive about the future.

Asked for his thoughts on the local market in the Netherlands and Belgium, Sipke responded: “It’s growing and it’s growing like wildfire.

“When I started my career the product was niche, expensive and only for smaller companies or the occasional emergency solution for a corporate. Today, the serviced office or coworking product in all its forms and shapes is becoming the only product smaller companies will consider.”

What’s more, he noted that medium-sized companies and corporates are now seriously considering having “all or part of their office needs catered for by serviced office products”, and TOO has first-hand experience of this trend.

Rotterdam Groothandelsgebouw social area
The Office Operators at the Groot Handelsgebouw, Central Rotterdam.

 

“Ever since we started we have been able to provide larger corporates with outsourced solutions for 50+ workstations that’s branded, flexible and completely tailored to their needs. Over the years, we’ve been host to the likes of LinkedIn, Pepsico, Salesforce.com and more recently Oracle and Booking.com.”

As for demand for TOO’s workspace at a regional level, Sipke has a key location in mind for immediate opportunities: “Amsterdam, Amsterdam and Amsterdam. The city is exploding at the moment with great numbers of companies, both national and international coming to the city.”

As a marker for TOO’s vision and accelerating demand for flexible workspace in the region, TOO has just attained the Dutch Financial Times Gazelle Award for fast-growing companies for the 4th year in a row.

However, Sipke is keen to add perspective to the picture.

“Let’s not kid ourselves. We are still only a marginal part of the overall market. All branded and single location operators combined in the Benelux region only account for about 2 or 3% of the available office space.

“But having said that, the market nearly quadrupled in the past couple of years and the number of new brands that came to market is staggering.”

Tapping into corporate demand for flexible workspace, this year TOO launched Sipke’s personal highlight of 2017 so far — “the opening of our Totally Outsourced Office Live in Rotterdam.”

This particular product is designed for companies from 25 to 1,000 people and offers a branded, tailor-made and personalised service. The facility is presented as a ‘show floor’ to potential clients, offering a “real live example of what we can do”.

Looking beyond the Benelux region, Sipke comments on further opportunities that are unfolding as the industry continues to grow and reach new markets.

“There’s an even bigger opportunity and that’s the market as a whole,” he said. “The amount of money being spent on our product, on operational workstations, is huge.”

Drawing on data from The Netherlands Facility Index, Sipke explains that companies in The Netherlands spend approximately €7,500 per annum on operational workstations (excluding IT), which equates to €15billion every single year.

The key opportunity lies in drawing customers away from buying costly individual elements and instead opting for an integrated, high quality flexible product. “Soon we could be looking at a multi-billion-euro industry across Europe. The likes of Blackstone or Oaktree investing massively in our industry is a very clear recognition of that simple fact.”

All things considered, the European flexible office market is in good shape and is facing towards a very bright future. The Office Operators are in a state of “constant expansion mode”, which reflects the current market as well as the vast opportunities available.

It may seem like business as usual. However, for a company that has grown to 24 centres in just 7 years, it’s nothing short of exceptional. Can we expect more of the same?

“Over the past couple of years we have been asked by customers and agents alike to start expanding on a Pan-European scale. I think we have the brand, product and infrastructure to do so,” added Sipke. “With some good planning and funding, it could very well be on the cards for us.”

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Jo Meunier

Jo Meunier

Jo is Allwork.Space's Senior Editor for the UK and Europe. Jo has worked within business centre and coworking circles since 2009, researching and contributing written features for numerous industry publications. She reports on the latest market news and delves into local issues with one main objective: to champion the flexible workspace industry and its members.

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March 24, 2023
U.S. Unemployment Claims Unexpectedly Dip For Second Week In A Row

U.S. Unemployment Claims Unexpectedly Dip For Second Week In A Row

March 24, 2023
IWG Considers £800m Deal For Digital Platform Worka

IWG Considers £800m Deal For Digital Platform Worka

March 24, 2023
Accenture Cuts 19,000 Jobs

Accenture Cuts 19,000 Jobs

March 23, 2023
Future Queen Of England Urges Business Leaders To Prioritize Workplace Wellbeing

Future Queen Of England Urges Business Leaders To Prioritize Workplace Wellbeing

March 23, 2023
Indeed Will Cut 2,200 Jobs

Indeed Will Cut 2,200 Jobs

March 23, 2023
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