Can Regional Workspaces Really Expect A Flood Of New Members? Here’s What The Experts Say

Published on June 25, 2020 - By Jo Meunier (née Disney)

• The need for physical distancing in the workplace could drive demand for flexible workspace. 
• Flexible workspace operators with regional networks and those with suburban and rural locations are likely to benefit the most. 
• During a recent panel hosted by GCUC UK, experts shared how real the demand from large companies is. 

One of many workplace trends that’s emerging during COVID-19 is the idea that large companies want to decentralise and spread their teams across regional flexible office hubs.

This drive for a ‘hub and spoke’ model comes from the sudden need for physical distancing in the workplace. Many existing office spaces cannot accommodate workers with the recommended distancing protocols, which according to UK government guidelines currently stands at “1 metre plus” (meaning people can be 1 metre away from each other as long as other safety measures are implemented, including protective screens and face masks).

Not only that, large headquarters in city centres now have the very real problem that staff can’t, or don’t want to, travel to their place of work. Public transport is running on very limited capacity and even then, with no vaccine for COVID-19, who wants to risk using public transport when they can work from home?

This poses an instant opportunity for operators of flexible office hubs in regional locations, particularly those with space in rural and out of town (suburban) areas.

So how real is this demand? Are corporate teams really decentralising and seeking regional hubs? Or will corporates simply wait it out?

A panel of regional flexible workspace operators took to the virtual stage at GCUC Manchester to share their insights.

The panel featured Emma Long, managing director of BizSpace (North), which has 105 locations around the UK – 96% of which are outside London – and Steve Lyons, managing director of MSO Workspace, which has 10 centres around England.

The panel was moderated by Richard Morris from technologywithin, a tech supplier to the industry, which is itself based in a regional location on the edge of Southampton.

Are Large Firms Enquiring about Space for Distancing?

“We have seen an uptake in existing customers taking extra space for physical distancing,” said BizSpace’s Emma Long. “We’ve just done a couple of big deals for large companies that are exiting city centres.”

While enquiries dropped during the first few weeks of lockdown, she noted that the quality of leads were, and are, better — people want the space and are prepared to act.

However while large enquiries are coming through and converting, Long notes that there is a mix of interest, with many enquiries coming from their target market of small businesses and startups.

“We’re a nation of entrepreneurs. What we’re seeing is that businesses are desperate to get going again and in terms of enquiries, things are coming back quickly.”

For MSO’s Steve Lyons however, there is a distinct lull in enquiries which is largely attributed to school closures.

“Smaller businesses are chomping on the bit to come back, but larger businesses aren’t so keen. Schools aren’t reopening until September, which is having a big impact. We are seeing an uptick in enquiries, but they are just that: enquiries. A lot of people are still sitting on the fence, waiting to see what’s what.”

Are Companies Really Looking to Subdivide Teams Regionally?

While there is a shift in companies looking to vacate city centres, currently the demand is coming from companies of all sizes — not just large teams looking to spread out.

Long notes that regional locations have already seen an uptick in demand over the past 2-3 years. The pandemic has introduced more urgency to these enquiries.

“We’ve seen this accelerate in the last 2-3 months. Even though people love the buzz of city centres, they are veering away and they’re now looking at the fringes, so they don’t have to use public transport.”

Lyons believes that the current situation is opening new opportunities for the flexible space sector, but it puts operators in a position of responsibility.

“Certainly we are seeing enquiries from people who are looking to work nearer to home, and kill the commute. But people do still need to be in city centres and we [flexible space operators] have to find a way to give people peace of mind.

“We can accommodate teams and keep people safe. We have a responsibility as an industry to get that message out there.”

Are Regional Operators Ready to Accommodate Large Requirements?

BizSpace has the advantage of over 100 locations across the UK, with the majority in regional locations outside of city centres. With a huge range of space in different sizes, they are in a favourable position to attract urgent enquiries.

Smaller operators may not have the space or the tech infrastructure to welcome corporate teams instantly, yet they often have the advantage of speed and agility.

“Speed to market and speed to act is important,” said Lyons. “Not many people are thinking of coming back yet, but there will be a mad scramble when they do. Our job is to act small and act quickly. We must make it easy for them to shop with us.”

Long noted that BizSpace plans to increase their flexibility with the help of technology to make it easier for people to come and go.

For operators with limited space, this would enable teams to split their time and share usage throughout the week. This would also enable businesses with lower budgets to get more out of their office space without needing to upsize for the sake of physical distancing.

“It’s about listening,” added Long. “Each person needs something slightly different. We need to find a solution for them and we, the industry, can definitely do that.”

What’s Next?

Looking ahead, there are a lot of ‘ifs and buts’.

For Lyons, a lot depends on how and when we emerge from the pandemic. We are likely to enter a recession — but how long will it last? Will it be short and sharp, or prolonged?

“We got through the last recession and a lot of opportunities came up. In the first 2 years we opened 8 centres on management contracts, all in crisis buildings where landlords needed a quick fix solution.

“But at the end of the recession, landlords sold the buildings and we moved to a lease model. It will be different going forward — a lot depends on the shape of the recession and how quickly we come out of it.”

It’s important now to focus on instilling trust and confidence in clients, he said, by “getting the message out there that our spaces are Covid secure”.

For Long, it’s about finding ways to accommodate the individual.

“There is no one size fits all. The UK is full of entrepreneurs but not every client has the same size pocket. We need different variances so everyone can afford to get out of the home office.”

Long added: “Know your customer, know what they want. Design your space around your customer base and you can’t go far wrong. That’s not just Covid related, that’s universal.”