As Liz Hamson wrote in her leader article last week, flexible office providers are expanding – and fast.
As noted, Spaces has recently announced plans to double its number of sites to more than 400 globally in the next year – up 397 since it first opened in 2015 signalling a rapid expansion. Meanwhile, WeWork is planning on opening yet another centre on London’s South Bank… the list goes on.
A recent report from JLL out earlier this week suggested that globally the amount of flexible space in the 20 largest flexible office markets grew by 30% in 2017 – equivalent to around 1m sq m, with the European flexible market predicted to grow at rates of 30% for the next five years.
While this is obviously positive news for the flexible office market, expansion of this sort could leave some players facing difficulty, as supply could begin to outstrip demand.
The operators that will survive and prosper will be those that can provide the most distinct service and differentiate themselves. The key to this is offering the highest spec, quality and service to their clients – as offices will be less about the space and more about the services that are provided.
Design will be crucial. To be successful, operators will need to invest heavily to enable them to offer their clients state-of-the- art facilities, privacy and the wow factor that many are demanding. As serviced office demand expands to more blue-chip firms such as finance and business, simply offering free beer and pizza will not be enough – office spaces will need to be HQ standard with the services to match.
As workers increasingly demand more from their workspace, and as lines between work and play become blurred and greater emphasis is placed on workplace wellness and happiness, these aspects of service quality – the softer, more human touches – will be increasingly important. Part of this will entail helping to create a community for corporate clients with regular wellbeing initiatives and social events.
All this could combine to address a bigger issue.
A flurry of recent reports has highlighted how the office environment can help boost workers’ efficiency. Since the global financial crisis, workplace productivity in the UK has remained historically low. Between 2010 and 2015, UK productivity growth was a disappointing 0.2% a year, far below its long-term average of 2.4% from 1970 to 2007. Perhaps the best serviced offices could help provide a solution to this perennial problem for the UK economy.