The role of flexspace in commercial property

Flexible space has felt the impact of the pandemic just like the rest of the commercial property sector. However, flexspace is unique in that it has provided a solution for businesses that have been forced to vacate their existing premises, whether that’s for financial reasons or otherwise. Flexspace is predicted to play a key role in business recovery as we emerge from the pandemic.

We’ve had to adapt since March in order to ensure that our existing tenants have a safe and hygienic workplace, and to attract new tenants, many of which may be considering flexspace for the first time.

Navigating the pandemic

Like many other companies, we used the first lockdown to carry out a risk assessment at each of our buildings and plan for how we could continue to operate. The desire to keep our spaces open was not simply from a business perspective – many of our tenants are small businesses that rely on flexspace.

As well as enhanced cleaning regimes, social distancing and one-way systems, our buildings already have technology that helps reduce the amount of human contact on surfaces. This includes automatic lights, automatic doors and key fobs. I expect workplaces throughout the country to make use of similar technology. Automatic lights have an added benefit of reducing energy use as they’ll only be on when a room is in use.

Marketing flexspace

Interest in flexspace has remained fairly strong considering the circumstances, and I expect a lot of that to convert to signed contracts once we have the all-clear to return to work en masse – potentially from April onwards considering the latest Government advice and the progress being made with vaccines.

Operators and landlords need to prepare now for marketing their space. Even though I expect strong demand, competition is fierce. At the end of 2019 there were more than 6,000 flexspace locations in the UK, and this may well grow as new players look to enter the market.

We offer virtual tours of our buildings so prospective tenants can get a real feel for the space. Of course, people still want to see a space in person before signing on the dotted line, but a virtual tour is great because it gives someone a good idea if the space is of interest to them before needing a visit. It also limits foot traffic to buildings which is so important at this time.

Finding the perfect space

For many businesses, the lockdown forced them to adopt working from home policies for the first time. Now, many are looking at flexspace as a viable solution in the future. This is for a number of reasons, including a desire to downsize from one large, central office to smaller satellite offices, and to give staff working from home an office alternative close to where they live. This will likely lead to an increase in demand for flexspace centres in suburban areas.

The number of flexspace options on the market is great for tenants because it makes prices competitive and drives innovation in the sector. That doesn’t necessarily mean that finding a suitable space is simple. Each different business has unique needs for space and it’s vital to find a space that ticks all the boxes. This is especially true for larger teams that will need 50+ workstations, such as corporates that are looking for alternatives to traditional offices.

In response to this, we have launched a new service called Orient. Businesses come to our team, backed up by 20+ years’ experience in the flex sector with Clarendon, and present a list of requirements. This can include anything from location to building type, and amenities to number of desks.

Our team presents a list of options of spaces that we can create to fulfil the client needs. We also negotiate the contract and manage the space to leave the tenant with one simple, monthly bill. Taking away office and facilities management from a company frees up time to focus on the business itself, which is especially critical right now.

Future office trends

As I previously mentioned, the flexspace sector is set to boom and tenants will have plenty of choice. I expect to see plenty of large corporations diversifying their real estate portfolios by adding flex – it reduces financial risk and benefits employees through cutting commutes.

Operators will need to innovate and adapt to remain competitive. Space is a service and landlords will need their finger on the pulse to understand what the market wants.

We’ve already started to adapt our model to cater to the potential new normal for some businesses with an offering called Convene. This works a bit like a timeshare. Office space can be booked on a daily rate or on ad hoc days, or for set days each week. For example, a business may book space on Tuesday and Thursday each month. This allows tenants the ultimate flexibility while also giving them access to a space with all the amenities and benefits of a traditional office. It also provides a great solution for businesses adopting a ‘hub and spoke’ model for employees that split their time between working in the head office and a a satellite office closer to home.

 

By Julian Cooper, MD at flexible space operator Clarendon

Author bio

Julian was a co-founder of Clarendon in 1998, where the company started in Clarendon House, Oxford. As managing director, Julian continues to expand the brand and the network of centres. Today, Clarendon operates centres across London and the south. Julian takes a key role in many aspects of the business but particularly enjoys sourcing and opening new sites and has great input into the layout, design and style of the centres.

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