• Marketplace
  • Resources
  • Business Directory
  • Events
  • Advertise
  • Brand Pulse
  • Publish a Press Release
  • Get the Newsletter
  • Contact
  • About Us
The FUTURE OF WORK® since 2003
Allwork.Space
No Result
View All Result
Subscribe
  • More
    • Columnists
      • Dr. Gleb Tsipursky – The Office Whisperer
      • Nirit Cohen – WorkFutures
      • Angela Howard – Culture Expert
      • Drew Jones – Design & Innovation
      • Jonathan Price – CRE & Flex Expert
    • Get the Newsletter
    • Events
    • Advertise With Us
    • Publish a Press Release
    • Brand PulseNew
    • Partner Portal
  • Latest News
  • Business
  • Leadership
  • Work-life
  • Career Growth
  • Tech
  • Design
  • Workforce
  • Coworking
  • CRE
  • Podcast
  • More
    • Columnists
      • Dr. Gleb Tsipursky – The Office Whisperer
      • Nirit Cohen – WorkFutures
      • Angela Howard – Culture Expert
      • Drew Jones – Design & Innovation
      • Jonathan Price – CRE & Flex Expert
    • Get the Newsletter
    • Events
    • Advertise With Us
    • Publish a Press Release
    • Brand PulseNew
    • Partner Portal
  • Latest News
  • Business
  • Leadership
  • Work-life
  • Career Growth
  • Tech
  • Design
  • Workforce
  • Coworking
  • CRE
  • Podcast
No Result
View All Result
Subscribe
Allwork.Space
No Result
View All Result
Advertisements
Nexudus - Tech Stack Lovers
Home Business

What’s In Store For The Flexible Office Market In 2020?

Guest ContributorbyGuest Contributor
December 23, 2019
in Business
Reading Time: 6 mins read
A A
Flexible Office Market

Savills’ flexible office specialist, Workthere, identifies the key themes it expects to shape the market in 2020.

  • Savills’ flexible office specialist, Workthere, identifies the key themes it expects to shape the market over the next 12 months.
  • Among them, Workthere expects more consolidation between providers but cautions that this could have a negative impact on client retention.
  • Other top themes include sustainability, and opportunities for flexible space in rural areas.

This article was supplied by Workthere, the flexible office division of Savills.

2019 was by far the most eventful year yet for the flexible office market, with the sector remaining at the forefront of industry conversations on a global platform. Demand has continued to accelerate throughout 2019 and we have seen relative expansion from providers looking to enter new markets, despite the challenges facing this sector.

Advertisements
Maximize Flexible Space Revenue

So what does 2019 hold? More of the same or will we start to see new trends emerge as the market adjusts to wider impacts in the economy?

Cal Lee, global head of Workthere, shares his views: “Flexible and serviced offices have remained a hot topic of conversation this year. Despite the recent reports surrounding the challenges facing WeWork, the sector has seen positive growth. The demand for flexible space is showing no sign of abating with both large corporates and small businesses using this type of space.

Advertisements
Nexudus - Tech Stack Lovers

“With more providers entering the sector and traditional office landlords also now offering flexible space, the competition in the market will continue to accelerate making it vital for providers to offer a point of difference and establish the right infrastructure required for a flex operator to remain relevant and sustainable in an ever-changing market.”

2020 Trends for Flexible Office Space

Savills’ flexible office specialist, Workthere, identifies the key themes it expects to shape the market over the next 12 months.

Customer Retention is King as Consolidation Continues

Advertisements
Yardi Kube automates flex and coworking operations

In line with Workthere’s prediction at the start of 2019, there has been continued consolidation across the flexible office sector. A prime example of this is The Clubhouse and Central Working, who both went into administration and were snapped up by IWG. There is no question that, as this market matures following its significant growth in the past five years, we will see more M&A activity.

Customer retention is therefore imperative in an industry that has become closely linked to the hospitality sector where customer service is king. With the ability for occupiers to easily switch between providers, it has never been more important for operators to focus on the service that they offer. 

Those providers most vulnerable in the next year are likely to be those offering an out-dated or poor quality product/service in an over-supplied sub-market, particularly those that signed a lease in 2015 and are therefore due for a rent review. Conventional rents have risen in the past five years, but desk rates have largely stayed stagnant (while both design and amenities have moved ahead in this time), putting pressure on under-performing centres and providers that have significant exposure to one single area of a city.

Blurred Lines

More stories for you

What Happens When Free Speech At Work Becomes Risky?

What Happens When Free Speech At Work Becomes Risky?

3 hours ago
Gen AI Outperformed Our Expectations

Gen AI Outperformed Our Expectations

4 hours ago
U.K. Flexible Office Space Supply Up 32% In Q1

U.K. Flexible Office Space Supply Up 32% In Q1

12 hours ago
“Choose France” Summit To Spur Investments Worth 20 Billion Euros Into Industry, AI, And Innovation

“Choose France” Summit To Spur Investments Worth 20 Billion Euros Into Industry, AI, And Innovation

12 hours ago

Where does a flexible office begin and a conventional office start?

For a long time the definition of a serviced office and conventional space was relatively black and white, however we are now seeing the line between the two become increasingly blurred as a wide range of spaces and models enter the market.

The average UK office lease length has shrunk from 9.7 years in 2002 to 6.9 years in 2018, according to MSCI data, and conventional offices are increasingly offering amenities that would previously only have been available with a flexible office membership. At the same time, flexible office average desk requirements are increasing, particularly with large corporates becoming a bigger part of the customer base. Knotel, which is considered a flexible office provider, has an average lease length of 3-4 years. This raises the question even now: where does a flexible office begin and a conventional office start?

Whilst several landlords have created successful spaces, it is no easy feat, and with the second and third round of landlords contemplating their offer, we expect more providers to partner with sector specialists as they seek to build clusters of like-minded businesses. One such example being Huckletree partnering with the Public Hall, where it runs a hub of GovTech-focused businesses. The increasing competition will add further need for providers to have a real differentiation. Price or design alone simply won’t be enough.

Advertisements
Maximize Flexible Space Revenue

Flexible Becomes the Norm

This may take longer than a year to fully come to fruition, but Workthere anticipates that the use of flexible offices from large corporations will become the norm, instead of being seen as progressive. Apple, BP, Facebook, Samsung, Alibaba, Microsoft and GlaxoSmithKline are just a handful of global corporates that are incorporating flexible offices into their real estate strategy.

Talent attraction and retention, improving space efficiency, collaboration and improving productivity are just some of the reasons that corporates are placing a portion of their workforce in flexible offices.

Sustainability Conscious

Advertisements
Disaster Avoidance Experts

The conversation around sustainability continues to evolve, particularly in the workplace. Many flexible office providers are sustainability conscious and have incorporated eco-friendly furnishings, ethically sourced coffee and recycling facilities within their buildings.

The Office Group is particularly eco-orientated and has buildings that feature photovoltaic solar panels, low energy sensor-operated lighting, and rainwater harvesting.

There is certainly more to be done around sustainability within the industry as a whole, but another issue is how to communicate sustainability information to the workers within flexible offices. Workthere research highlights that nearly two thirds of flexible office workers think that the environmental performance of their workspace is important, but less than half are happy with it in their current office.

With the eco-conscious Gen Z entering the workforce, communication of office sustainability initiatives and statistics will need to improve, be it via formal standardised reports or by informal means, such as monthly newsletters to members.

Advertisements
Disaster Avoidance Experts

Can Flexible be Rural?

Workthere’s What Coworkers Want* research shows that there is a noticeable disconnect between supply and demand when it comes to flexible offices in rural locations with only 7% of respondents working in a rural flexible office, but 16% would like to if given the choice.


Suggested Reading: What Workers Want: 40% Of Flexible Spaces Not Getting The Basics Right


Inevitably the market for rural flexible offices will not be as big as the market within major cities and towns, but with a focus on work-life balance and reducing commuting times, the popularity of rural flexible spaces is likely to gain more traction.

Jessica Alderson, global research analyst at Workthere, says: “The continued success of the flexible office market is very much dependent on operators and landlords providing a space–as-a-service that is both relevant to current demands and also those of the future.

“Areas such as sustainability, productivity and technology offer huge potential for development within the sector in terms of creating competitive spaces that meet the ever-evolving needs and requirements of occupiers.”

*The What Coworkers Want report is based on a survey conducted by Savills and undertaken by YouGov between March and April 2019, which surveyed over 11,000 office-based employees based in France, Germany, Ireland, Italy, The Netherlands, Norway, Poland, Portugal, Spain, Sweden and the UK, with 1,000 workers surveyed in each country. 1,874 respondents of the overall total consider their main workplace to be either a serviced or coworking office, and we included both of these groups in the flexible office category.

Advertisements
Subscribe to the Future of Work Newsletter
Share5Tweet3Share1
Guest Contributor

Guest Contributor

If you would also like to be a contributor to Allwork.Space, please contact [email protected]

Other Stories Recommended For You

What Happens When Free Speech At Work Becomes Risky?
Work-life

What Happens When Free Speech At Work Becomes Risky?

byEmma Ascott
3 hours ago

Speaking out at work in 2025 carries rising risks as political and cultural tensions grow.

Read more
Gen AI Outperformed Our Expectations

Gen AI Outperformed Our Expectations

4 hours ago
U.K. Flexible Office Space Supply Up 32% In Q1

U.K. Flexible Office Space Supply Up 32% In Q1

12 hours ago
“Choose France” Summit To Spur Investments Worth 20 Billion Euros Into Industry, AI, And Innovation

“Choose France” Summit To Spur Investments Worth 20 Billion Euros Into Industry, AI, And Innovation

12 hours ago
Advertisements
Disaster Avoidance Experts

Unlock your competitive edge in tomorrow's workplace.

Join a community of forward-thinking professionals who get exclusive access to the latest news, trends, and innovations that are shaping the future of work.

©2024 Allwork.Space News Corporation. All Rights Reserved.

Exploring the Future Of Work® since 2003.

Advertise   Newsletters   Privacy Policy   Terms Of Use   About Us   Contact   Submit a Press Release   Brand Pulse   Podcast   Events   

No Result
View All Result
  • Home
  • Latest News
  • Topics
    • Business
    • Leadership
    • Work-life
    • Workforce
    • Career Growth
    • Design
    • Tech
    • Coworking
    • Marketing
    • CRE
  • Podcast
  • Events
  • About Us
  • Solutions
    • Advertise | Media Kit
    • Publish a Press Release
    • Brand Pulse
Subscribe

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
-
00:00
00:00

Queue

Update Required Flash plugin
-
00:00
00:00