It’s good to be back in London after a week’s break in Scotland and the North. Strangely it was virtually impossible to secure a hotel room in the Lake District and Yorkshire countryside as, with the alternative of foreign travel remaining problematic, UK hotels are full which must be good news for the rural hospitality sector.
It is interesting to see how the office sector is responding to the pandemic and the prospect that employees may well continue to work from home some of the time and may also want the option of a co-working office close to their home. In the US, Cushman & Wakefield is teaming up with flex workspace startup Industrious to provide flex office space outside the corporate environment, according to the Wall Street Journal.
Founded in 2013, Industrious has approx 100 locations in 50 US cities. In the UK one of the pre-pandemic partnerships was between Knight Frank and flexible office provider Work.Life, to offer a new flexible managed workspace solution, Yours, an operating platform for landlords who wish to provide a customer-centric managed solution, but lack the capability or capacity to take on the operational burden themselves.
We are likely to see more such partnership arrangements as working patterns continue to develop. Some of the larger Landlords will continue to develop their own flexible brands whilst others will choose to partner with specialists.
My erstwhile co-panelist Ronen Journo, senior vice president of enterprise and workplace for WeWork, has a better idea than most what the future holds for offices. Since April, he has been talking to the heads of real estate at some of the world’s largest corporates, who combined apparently represent more than 6 million people who use offices.
In a recent article he summed up the future of offices as follows: ‘Ten years ago, people were liberated from the cubicle and we saw the dawn of the open-air office. Now we’re seeing a revolution where people are allowed to work from home. I think what we’ll see next is people being liberated from any one specific location, either home or office, and being given a choice of how and where to work from wherever it makes sense for them. The idea of “work from anywhere” combined with a drive for community congregation will create new demand for flexible workspace providers.’
In response to this demand, WeWork recently announced WeWork All Access, a new monthly membership that allows access to any WeWork location across the US and Canada. It will be interesting to see if this is rolled out internationally. In the US, WeWork has scale as it is located in 40 cities across 400 buildings with several locations within each city. So WeWork All Access potentially gives members the flexibility to reduce their commute times while businesses can distribute their workforce and maintain productivity.
Meanwhile the HQ office is by no means dead. After hearing from the CEOs of a number of tech and other corporate over the last few months that their workforce can work from home indefinitely it was good to hear Alphabet CFO, Ruth Porot interviewed on Bloomberg stating that ‘when people are together it’s a critical element for innovation’ and ‘collaboration supports innovation’. She also talked about the productivity lift that comes from allowing people to have flexibility.
The acceptance of flexible working patterns engendered by the pandemic has been positive for Daisy Chain, a company set up in 2017 by Louise Deverell-Smith to help place working parents who want to work flexibly. She said, “Businesses and workers have had to be incredibly creative and resilient during this period. The move to flexible working arrangements and working from home has allowed many businesses to survive and many workers remain in employment. As we move into the autumn, flexible working and working from home arrangements are continuing to cement themselves as the norm throughout the UK and will be crucial to maintaining the recent economic recovery.”
I particularly enjoyed my most recent podcast interview with Brian Bickell, CEO of west end landlord Shaftesbury PLC. Apart from fascinating insights into his long career at Shaftesbury, the current challenges for the west end and what Christmas 2020 may look like, Bickell offered some useful advice including ‘have a bit more confidence in yourself’ and that ‘you should learn something new every day’.
Also, and importantly, if you make a mistake admit to it as the worst thing is to cover it up. We will be learning a lot as, according to Bickell, you learn more from your mistakes in tough times! Bickell is also a member of the board and one of the original founders of Freehold, the London-based LGBT real estate professionals group and promotes diversity in the real estate sector. He told me, ‘When Freehold started, nobody wanted to know about us.’ He acknowledges that progress has been made on diversity in the real estate sector but we must carry on effecting change or we risk slipping backwards. Listen to the podcast here
Many of Shaftesbury’s tenants are restaurants and bars. The big news for the hospitality sector this week was the High Court ruling in the FCA (Financial Conduct Authority) v Arch Insurance business interruption litigation, offering hope to more than 370,000 claimants seeking coverage for pandemic losses under their business insurance policies.
Mishcon de Reya acted for two representative groups of policyholders, the Hiscox Action Group and the Hospitality Insurance Group Action. My partner Sonia Campbell leading for the hospitality interveners, quoted in Hospitality & Catering News said, “I am delighted with today’s judgment and what this means for many thousands of policyholders. We identified at the very outset that many of these policies covered Covid-related losses, and the judgment is a vindication of our position.
For many hospitality businesses in particular, having their insurers pay out on their Business Interruption insurance policies is a matter of survival’. So this could be good news for many hospitality businesses waiting for payouts from their business interruption policies.
And for those that insist that you don’t meet interesting new contacts working virtually, I had the pleasure this week of being introduced to a remarkable New York based serial entrepreneur, David S Rose. By way of background Rose has been described as “New York’s Archangel” by Forbes, “patriarch of Silicon Alley” by Red Herring, and a “world conquering entrepreneur” by BusinessWeek. He is CEO of Gust, a SaaS platform powering over 600,000 startups and 75,000 early-stage investors.
He’s also the NYT best-selling author of “Angel Investing” and “The Startup Checklist.” Rose is also the founder and CEO of the US Real Estate Market, a capital markets platform on which institutional investors acquire and sell shares in real assets. He is proud to describe himself as a fifth-generation entrepreneur. In 1928 his grandfather and great uncle founded a construction company which became one of the largest East Coast real estate developers. They are clearly a dynasty of high achievers as in 1997 during the dot-com boom Rose was a finalist for the Ernst & Young Entrepreneur of the Year award in New York. His father went on to win it in 2003!
And finally, as we increasingly appreciate the benefits of outside space and a green environment a word of caution from a housing project in China. Philip Oldfield, Director of Architecture Program and Associate Professor at the University of New South Wales in Sydney, Australia, tweeted ‘Only a handful of families have moved into Chengdu’s Qiyi City Forest Garden because of an infestation of mosquitoes’.
According to an accompanying piece in the Strait Times an experimental green housing project in a Chinese megacity promised prospective residents life in a “vertical forest”, with manicured gardens on every balcony. All apartments were sold but instead of a modern eco-paradise, the towers look like the set of a desolate, post-apocalyptic film. The problem? The mosquitoes love the plants, too.
Susan Freeman is a partner at Mishcon de Reya
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