Take-up of flexible working spaces is booming. So does this mean that the traditional office is set to become a thing of the past? We take a look at the evidence…
Committing to a long lease or purchase arrangement, putting your corporate stamp on the premises and generally laying down roots: all of these are hallmarks of the traditional way of thinking about office property. Especially for established businesses who can predict their future needs with reasonable certainty, this approach can make perfect sense.
Yet by no means do all businesses fall into this category. For SMEs and global corporates alike, short, medium and long-term predictions on capacity (and even on where you’ll want to be based in a few years time) can be a tough call.
Increasingly, businesses desire flexibility – and thanks to an ever-increasing range of serviced offices, that’s precisely what they are being offered. But there’s much more to managed flexible office spaces than the ability to get in and get out quickly and cheaply. Often boasting enviable facilities combined with a dynamic vibe, they deliver the type of environment that companies – not to mention their employees – can find hard to resist.
Already a major part of the property landscape, it’s worth considering whether the serviced model is on the cusp of taking over as the go-to option for occupiers.
The numbers: are serviced offices set to take over?
London can rightly stake its claim as the world capital of flexible working spaces. Last year, according to Property Week, there were 826 flexible working spaces in the city (New York, by contrast, had 230).
Demand for serviced offerings in London has spiralled over the last couple of years; in 2015 take-up went up by 36%, which meant that the take-up for that particular year was higher than for 2009-13 combined.
One thing is clear; serviced offices are no longer a niche part of the property industry. In the capital, they already account for 15% of office occupancy, and that percentage is creeping up gradually. It wouldn’t be accurate to say that they are on the verge of taking over from leases as the mainstay arrangement (at least, not yet), but it’s clear that businesses are tapping into their benefits in ever-greater numbers.
Flexible workplaces complement new ways of working
It’s becoming less common for an entire workforce to all be tied to their desks, 9 to 5, five days a week. On the one hand, client meetings, time spent on travel and a host of other routine work activities require staff members to be away from their workstations.
Alongside this, flexible working arrangements are on the rise. In 2014, the right of workers to request flexibility become enshrined in law. Recent research from Lancaster University suggests that half of UK businesses will have adopted flexible working in one form or other by the end of 2017. That proportion is expected to increase to 70% by 2020.
When the benefits of flexible working for businesses are discussed, the emphasis is usually on the positive implications it can have on employee wellbeing and the knock-on effects on productivity. But there’s a further benefit for businesses, too: the opportunity for a company to reduce its property footprint and overall spend on premises.
It’s perhaps no surprise that serviced offices have grown in popularity at the same time that companies are starting to roll out flexible working arrangements in ever-greater numbers. Offering convenient touchdown points, meeting zones and a fluid hotdesking setup, this type of environment is perfectly suited for a mobile workforce. It’s reasonable to assume that the rapid growth of serviced arrangements will continue to run hand in hand with the increase in employees exercising greater control over when and where they work.
Flexible does not necessarily mean temporary
The ability to move into a serviced office quickly on a rolling contract and without a long-term financial commitment is ideal for businesses with hard-to-predict accommodation needs.
So does this make flexible offices essentially a stop-gap for companies in a state of flux? Not necessarily. Yes, they can be ideal for a startup looking to test the waters in a honeypot location. But something else is happening too; research from the City of London Corporation indicates that of those occupiers who opt for the serviced model, a significant proportion are staying for two, three years – sometimes longer.
Increasingly, businesses opt to be as flexible as possible, they find out that the arrangement suits them – and they stay. Even global corporates are starting to include serviced accommodation in their wider property portfolio; the possibility of having your fee earners mixing with a vibrant community of up-and-coming entrepreneurs can do wonders for networking, morale, not to mention growing your client list.
‘Flexibility’ is an attribute that businesses of all types and sizes are coming to appreciate for all sorts of reasons. So long as this remains the case, flexible workplaces are likely to continue to grow in popularity.
Are you ready to discover what this model could mean for your business? Now’s the ideal time to search the serviced office market with DeVono Cresa.