In practice, this means best-in-class buildings that can meet changing trends because they are flexible and re-useable. But it also means buildings with some personality.
‘What matters to us is the physical flexibility and adaptability of the building, so it can change as the world of work changes. Perhaps some older buildings are a problem there, maybe with compromised floor heights, or problems with natural light. But that might be off-set by some other really interesting point of difference. It might be historic, for instance. And these days we balance the criteria of flexibility against other softer factors,’ Jonathan says.
Does this mean investors like Aviva are madkeen on coworking platforms like WeWork? The answer is surprisingly equivocal. In the month that WeWork finally unveiled plans for a public listing on the New York Stock Exchange – but also revealed its latest $900 million first-half loss – Jonathan reveals a nuanced horses-for-courses approach with big implications for office design.
‘We’ve been doing quite a lot of thinking about it. JLL say that 30% of the global office market could be flexible in the long-run, which would include coworking, and we are paying great attention. But we wonder if there might be some more cost-effective solutions like, for instance, fitting out offices to Cat B standards, rather than Cat A, and comparing the outcomes, because maybe occupiers like the transparency of knowing how much these things cost,’ he says.
Aviva have begun trialling this approach, offering occupiers Cat B fit-outs, and are trialling different approaches in different markets.
Meanwhile, they are experimenting with the coworking giants, including WeWork. ‘We have them in our Cambridge offices, and we agreed a revenue-sharing deal with them, because this is a great location and it gives us confidence,’ Jonathan explains. ‘Operators like WeWork bring more life and vibrancy to an office building, and we’ve heard occupiers in London say they will only take floorspace in office buildings with coworking as a tenant, so they can shrink or expand their own footprint.’
In other words, coworking may or may not make money for its operators (Aviva certainly hopes it will in Cambridge) but it might nonetheless serve a useful function for landlords and the investors who stand behind them.