Editor: In his recent interview with Property Week, IWG founder Mark Dixon argued that large landlords should not set up their own flexible workspace operations but should instead partner with established flexible workspace providers.
His argument was based on the premise that landlords should not take a risk by going into an area in which they do not have expertise.
This line of thought does have some merit, particularly with the ever-increasing number of flexible workspace providers now in business. With a greater choice than ever of more specialised flexible workspaces, those who provide such spaces are facing tough competition to attract and retain clients.
As such, landlords are undoubtedly taking a chance when setting up their own brand-new operations, especially when confronted with more experienced competitors.
What Mr Dixon does not say, is that while this approach may entail risk, it can also bring reward. The companies that he mentions – Landsec and British Land – are significant landlords that have the capacity to experiment.
While in the initial years they could face difficulties, they will develop expertise over time – and if managed correctly, they will be able to profit far more by having started their own operations.
However, this approach should not be taken by all landlords. Many do not have the financial capacity, skillset or desire to run their own operations.
For landlords such as these, which nevertheless want to take advantage of a growing flexible workspace market, joint venture management agreements with flexible workspace operators are a practical way forward, offering a sensible model that balances exposure and profitability.
So, while Mr Dixon is not entirely wrong in his assertions, the choice facing landlords is not as binary as he perhaps makes out.
Will Kinnear, director, GKRE
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