The health of the nation and the economy have been the two key themes since the start of the pandemic. As we progress forwards from the height of the virus, the economy is taking centre stage and the workplace is the lead act, writes Julian Cooper, managing director, Clarendon.
The Government is now campaigning for people to return to the office with a carrot and stick approach. How effective this campaign is remains to be seen. A BBC survey of 50 of the UK’s largest employers found that half have no plans in place for staff to return to the office, while research by property firm Accumulate Capital found that 73% of businesses expect to downsize their office space as a result of Covid-19.
One thing is for certain – the way we work has shifted irrevocably and no one is sure what the future of work will look like.
What we can expect to see is a rise in flexible office space usage among business of all sizes. Flexspace has long been associated with SMEs and start-ups because it provides all of the necessities (and perks) of a modern office without the commitment to a long-term lease.
Flexspace is also becoming an ever-more important part of corporate real estate portfolios. In 2018, JLL predicted that flexspace would account for 30 per cent of corporate portfolios by 2030. The pandemic is likely to accelerate that prediction as large companies look to diversify their portfolios to manage risk.
As the BBC and Accumulate Capital research suggests, a significant number of businesses are in no rush to encourage employees back to the office. Some companies, such as Twitter, have even gone so far as to say that employees will be able to work from home forever.
For the corporates that do plan on welcoming staff back at some point, it will likely be at much lower occupancy levels. If that’s the case, business leaders will be giving serious consideration to the value of paying rent on a building that is always below capacity.
Furthermore, despite the proven benefits that come with working from home, having a workplace does have its positives. The office is a place for people to collaborate, connect and feel like a team. It’s all very well scheduling a video call for a brainstorm session, but sometimes the best ideas come spontaneously when chatting to a colleague in an office communal area.
Flexspace is a great solution because it offers a physical workplace, often in suburban areas or very close to transport links. However, flexspace operators will need to tweak and evolve their offerings in order to attract tenants.
We’ve recently launched Convene, a service that allows businesses to book flexible office space on an ad hoc basis, or on set days each week or month. We can see a demand in the market for the ultimate flexibility in office space, particularly in the wake of the pandemic and with many businesses working on razor thin margins. Employees retain flexibility in where they work, and businesses can keep their structure and community without any financial risk.
As the flexspace market continues to grow, we’ll also see an increase in brokers and other services that help businesses find flexspace. In lieu of having their own company building, many businesses will be eager to ensure that the flexspace they operate in retains the look and feel of their brand.
Each business will also have their own unique criteria of what they want in their space, from location to amenities, and number of desks to design and layout. We can expect brokers to offer a comprehensive service that includes finding flexspace, designing and fitting it out, and managing it on behalf of a client.
Though flexible space has been available for decades, the pandemic has brought it to the attention of business leaders like never before. We could be on the cusp of a workplace revolution and from that perspective, it’s an exciting time to be involved.
Clarendon provides a portfolio of dynamic offices in prime locations throughout London including Soho, Mayfair and Marble Arch. Our portfolio extends across the south of England, including offices in Oxford, Bath and Bournemouth. Founded in 1998, we are named after our first building - Clarendon House in the heart of Oxford. Since then we have provided businesses of all sizes with exceptional office spaces in modern and period buildings alike.