Are you seeing a change in the demographic/businesses now using your spaces?
It might have taken a global pandemic for companies to be able to realise the benefits of considering more flexible workspace as part of their commercial real estate strategy, but it seems inevitable now that we are going to see more and more businesses of all shapes and sizes looking for a flexible workplace approach with agility at its core. Businesses are realising that the new normal will mean not just offering more flexible working locations but also understanding their operational performance and the value they represent – something many have struggled with in the past. From a data perspective, the market in the UK has seen requirements for flex space grow in size to an average 5+ people last year (from 2+ in 2015), and this increase in size is being driven by corporate interest in flex.
What are the greatest challenges for coworking/flexible workspace right now?
It is a services business and one that is much more dependent on cash flow than that of the asset-managers/landlords, who have historically dominated the office market. The reality is that many clients are not paying their bills right now and that is eating into the cash flow of the sector. But there is the very real sense that, if the operators can get through the next six months, then there is a very healthy, profitable market there for them.
We saw after the trials of 2008 that, as the contingent workforce of entrepreneurs grew following Lehman Brothers’ collapse and then the global financial crisis, it forged the future of coworking and flex space. All those new businesses that were created at that time chose to use flex space rather than work at home as they wanted to be privy to the networking and energy that type of workspace brings – it really made the market for flexible workspace and I see no reason why we will not see that happen again in 2021, and the sector take another quantum leap.
What are the greatest opportunities for coworking/flexible workspace right now?
Agility now takes on numerous meanings as a business quality: agility around workplace occupancy, design, location and tenure. For flexible workspace, this provides a significant opportunity. At the beginning of the year, we predicted that flexible workspace would make up 12.5% of total office supply in the UK by 2023 – we are now confident that we will more than exceed that.