The year has seen drastic changes in the workplace and to our ways of working, namely the increased demand for flexible working and an emphasis on health and well-being, hygiene and work-life balance
How has the office landscape changed? Will businesses move away from a single headquarters? Will city fringe office space be in vogue? And how does remote work or working from home play a part? These are just some of the top recurring questions that occupiers are asking as our ways of working and workspace needs continue to evolve rapidly.
The effects of COVID-19 have accelerated trends that were previously forecasted in the flexible workspace sector. These included enterprise outsourcing being mainstream, highly amenitised assets with best-in-class hospitality being ‘table stakes’ for any new office development, a continued boom in wellness offerings, a revival of suburban locations and further operator segmentation.
"Essentially, flexible workspace is the outsourcing of real estate to an operator, whether it is the owner of the asset or a third-party flexible workspace operator... We expect an upswing - including from larger, global organisations - in enterprise outsourcing."
Going forward, flexible workspace will play a pivotal role in occupier models. Occupiers expect more, not less, to establish offices as the place to supercharge collaboration and innovation.
Related content: Flexible Workspace Outlook APAC report
While the physical elements of a flexible workspace remain the same, it has now gone beyond just being the idea of a single environment integrating a generally open-layout with collaborative spaces, dedicated work stations and the bells and whistles of a modern office.
Essentially, flexible workspace is the outsourcing of real estate to an operator, whether it is the owner of the asset or a third-party flexible workspace operator. While this is typical for start-ups and smaller businesses, we expect an upswing - including from larger, global organisations - in enterprise outsourcing.
We can also see new trends emerging such as the integration of home as a place of work and the growing importance of the digital experience. As markets start to recover from the effects of COVID-19, we expect to see an increase in demand for flexible workspace models, particularly because there will be a greater emphasis on health and well-being, hygiene, and work-life balance going forward.
We break down five models in which asset owners can deliver flexible workspace for occupiers.
#1 Managed Office
A fully outsourced workspace delivered by a flexible workspace operator, including all elements of launching and operating an office. The new facility is a private environment and can be customised to look and feel like the occupier’s “own” space. Occupiers can increase the flexibility of their portfolio through shorter commitments, mitigated capital expenditure and reduced balance sheet liability.
Managed space bridges the gap between a lease and traditional flexible workspace, arguably allowing the occupier to have the best of both worlds.
#2 Flex and CoreTM
This is when an occupier partners with an operator to enter an asset. The occupier either commits to less space for their core requirement and the operator or asset owner launches a flexible workspace location in the same building. Alternatively, the occupier commits to ‘anchor’ the new location and provides options for future expansion.
A Flex and CoreTM strategy provides the benefits of long-term security for core operations and allows flexibility for growth, to manage fluctuating and/or unpredictable headcount projections. The level of amenities for employees is elevated with access to spaces such as meeting, conferencing and event spaces, while reducing the occupier's core commitment.
#3 Reverse Flex
Reverse Flex allows an occupier who has underutilised leasehold space to reduce property cost by partnering with a flexible workspace operator to repurpose a space into flexible workspace. This helps to mitigate property expenses and even generate income.
#4 Hub and Spoke
A Hub and Spoke model reduces real estate costs by reducing the amount of space at a centralised headquarter location and taking smaller hubs in city fringe locations. This can result in improved work-life balance for employees and reduced commute times. Outsourcing the delivery of these locations reduces operational burden, improves workspace environment, lower lease liability and provides back up business continuity.
#5 Digital Campus
When an occupier has teams of individuals that work remotely or travel frequently, it can offer membership to a network of drop-in spaces across a region that can improve efficiency and productivity for its remote workforce. Memberships are highly flexible, and occupiers will have the ability to reduce physical office portfolio and fixed property expenses.
You may also like:
- Real Estate Talk: Singapore Office Market - Q&A with Rick Thomas
- Recommendations for Flexible Workspace
- Flexible Workspace: A strategy to cope with uncertainties
Liked what you read? Subscribe to our mailing list for more thought-pieces on the latest in commercial real estate.
Contact our Colliers Editorial team here.