There was once a time where people considered “work” to be a location. There are some dinosaurs who still consider “work” to be a location rather than an activity we do as part of our employment. Just to remind us all: Work is defined as:
- Activity involving mental or physical effort done in order to achieve a purpose or result; or
- A task or tasks to be undertaken.
I really like the purpose side. I do wonder how many people simply do the “tasks” but don’t really understand the purpose.
In early 2020, sadly due to a pandemic, many realised that the ways of working from 2019 and before were outdated and with the rise of technology and choice we could change our behaviours, lifestyle and needs. This has triggered organisations to really look at their policies around work leading to many opting to either go remote, remote-first or hybrid form. It has become integral to how we operate, providing choice and flexibility.
A growing number of corporate organisations are looking to utilise flexible working spaces, including Dixons. In a number of cases this is part of an evolving real estate strategy as organisations seek to find the right model for their operations going forward. The use of flexible workspaces is allowing trials to be performed in locations where there is no presence at the moment, rather than committing to longer leases on real estate. There needs to be a choice of high quality work space as evidenced Clifford Chance moving back to the City for high quality office space (though noted less space than they had in Canary Wharf.
Given employees more choice and allowing them to be flexible in how and where they perform their work is a key driver to talent retention. Remember, you are now competing with the globe. Many former office-based roles can be performed anywhere and therefore why not take on a role for a US or Australian organisation if you are still allowed to remain in the UK but have better flexibility in your role.
Well demand for the office was low during the pandemic for obvious legal reasons but it hasn’t really returned to 2019 levels. Or even close! Data from Remit Consulting shows it was c30% which is below historic averages by a significant way.
If you look specifically at some cities. Manchester, as a large city in the North, is beginning to attract giants in industry with Amazon, Allianz and HSBC all investing in Northern hubs in the city. Big names like these and others creates a demand. A demand for highly skilled employees who in turn move to the city (or at least closer to it). There is an ever growing number of flexible work space provides in Manchester too as highlighted by Hubble with Hana by Industrious, Bold, X+Why and Serendipity (to name a few).
The consumers of real estate have changed their expectations. There is a demand for quality spaces. Spaces that the talent of an organisations wants to use – not use everyday but use when they need to. In the fight for talent, being able to offer the best will support the retention programme. These spaces will, and are, attract a premium. With each new asset that is constructed there is a need for operators to raise the bar, a better experience and service. And jumping back, there is a need that the asset has an operator in it. It could be an inhouse operator but there needs to be flexible workspace that caters to the need and demand
London is and will remain a key business location for organisations as demonstrated by transactions in 2022 for Currys and Amazon. Large organisations like these committing to the city will convince others to follow suit. The pandemic has eroded the assumed geographical boundaries and therefore with a cost focus, can see the benefits of moving to the regions to capitalise on availability of space along with lower real estate and people costs. Deals like Currys highlights that flexible workspace is simply not for SMEs and Start-Ups.
Cities like Leeds, Yorkshire, are growing with the demand for flexible workspace increasing. The commute to London has made some look at other locations where they can get more for their money, have less commute time and a better way of living. That said everyone has different priorities and it will allow for London to still attract but other cities will be able to accommodate too.
Incorporating regional hubs into a real estate portfolio has many benefits – and it’s just a cost implication. The access to wider talent pools provides a huge benefit to organisations. Cities like Leeds and Sheffield have a growing flexible office market – both cities have leading universities and are driving growth with start-ups and scale-ups while also attracting larger organisations. Providers like Cubo, Wizu and 2-Work are opening new locations and establishing a market need for flexible products in regional cities.
So, in conclusion, with the rise of hybrid working this means that flexible workspaces are becoming a go-to-choice for organisations allowing their employees to enjoy the choice of product to meet the work at hand. With the increased demand, a wider audience utilising the spaces and employee and employer expectations evolving there is clear growth that will occur in the flexible workspace market.