What’s driving the flexible revolution?
Industries are being disrupted. Businesses are having to innovate. Real estate needs to adapt. Where does this leave the traditional office? Well, one thing’s for sure; corporates want them to develop flex appeal.
We’ve recently discussed how large global corporates’ use of office buildings is changing, and how they are facing new challenges impacting their use of space across their portfolios. The rise of the flexible office is thus one of the hottest topics dominating the corporate real estate world right now. We know this from CBRE’s annual EMEA Occupier Survey but we wanted to dig deeper to see what they really think about flexible space. So, in the summer of 2017, CBRE Research and our London Advisory and Transaction Services team interviewed 25 of our global, European and UK corporate clients to see what’s driving The Flexible Revolution.
Four main insights have emerged, each presenting an opportunity for landlords to develop the ‘flex appeal’ of office space to meet changing corporate demands.
- The vibe that’s currently provided by flexible office types is attractive, but it’s by no means perfect. Corporates told us that the quality of the workspace is often inadequate. Examples include excessive noise in open areas or poor-quality design, so there’s a gap between what’s currently provided for start-ups and SMEs by operators, and what corporates actually want. What can landlords do to close this gap?
- Currently, the scale of corporate flexible office space occupation is relatively small, despite the rise in the number and variety of spaces on offer. These, for now, are mainly occupied by the entrepreneurial and start-up end of the market, but corporates say they would use flexible offices more given the right product. Can landlords and operators provide the right product?
Perhaps most interestingly, corporates mentioned that the model of many existing flexible office operators is incompatible with their own brand and identity. One of our clients said:
Identity (and brand) are so important. It’s about connections, purpose and connecting people. How do we create a brand in flexible space?
Can landlords start answering that question?
- Finally, the flex appeal is about the lower cost option it provides corporate occupiers. Why can it be cheaper? Because you only pay for what you want, how much you want, what you want, for as long as you want. How can landlords finesse their office space to give the occupier ultimate flexibility?
These broad themes tell us something; the flexible office is here to stay. Fundamental shifts in the economy, technology and corporate behaviour over the last decade, have contributed to a fundamental change in how corporates look at their real estate, which helps explain the rise of the flexible office. The question is, how will you react?
For more information on what this might mean for you and how you can take advantage of the flexible revolution, read our report here.
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