Flexible working is impacting modern office requirements

Flexible workspaces are set to grow by up to 30% annually for the next five years across Europe, according to property firm JLL.

There has been a massive cultural shift in the way we work. Many businesses are quickly adopting a modern way of working with beers, table-tennis and slides in the office. These initiatives may not be suitable for all sectors, but a trend that seems to be moving across the masses is flexible working.

The developments in technology have allowed flexible working to (almost) become the norm, with more and more people working remotely or wanting flexible working when looking for a new role. The Financial Times reported that in 2017, 43% of all UK employees had some form of flexible working, compared with just 30% in 2014.

Why is flexible working so popular?

There are numerous benefits that come with flexible working for both employees and employers including:

• Reduction of commute time, costs and environmental impact
• Work/life balance
• Staff feel valued
• Increase in morale, engagement and commitment to an organisation
• Reduction of staff turnover
• The attraction of a higher level of talent
• Reduction of sickness

How are businesses benefiting?

Flexible workspaces allow growth without committing to the more traditional, inflexible, long-term leases – increasing cost-efficiency and speed to market.

• Technology is a sector benefitting massively from the concept, they are fast-growing businesses which need to be able to react fast to projects – often requiring an increase in headcount.
• Entrepreneurial business growth is rising rapidly with owners coming out of their kitchens/home offices and congregating in co-working environments. The shared spaces offer great opportunities to network, share ideas and amenities, and build business relationships.
• Large corporate tenants often have the power and growth to fully utilise the space. The flexibility supports opening additional offices in new locations without real estate challenges.

How is the property market affected?

Flexible workspaces are clearly fast-growing, with WeWork being a prime example of a rapidly growing business capitalising on this trend. JLL has described the growth as one of ‘the biggest shifts in the property industry’, resulting in a vast increase in the number, variety and quality of flexible offices in the market.

Landlords and investors are increasingly looking at flexible space to see how they can efficiently expand and maximise their current portfolio. It is predicted that flexible office space will account for at least 30% of portfolios across London and other large cities by 2030, so although landlords will face challenges and concerns such as lack of experience, reduction of average letting size, distribution of cashflow, competition and questioning if their space is suited for flexible working – the increase in demand is an opportunity which cannot be missed.

New, agile strategies and processes need to be implemented to meet the market growth, elements such as fit-outs, rents, service charge, insurance, IT, business rates, hospitality-type services and amenities, all need to be addressed. It is also important to consider what flexible offices of the future will look like: will working from home result in more meeting room space required and fewer desks? How can hot-desking be enhanced? Will the growth remove the need for a permanent desk completely?

Flexible offices are high on the occupier’s agenda and as tenants continue to assess the way they use office space, the commercial real estate market will continue to adapt and evolve.