Its space but not as we know it
As work changes in nature and method, so the role of the workplace will evolve to meet future needs. Adaptation to a new supply side dynamic has begun.
2 minutes to read
Demand for co-working facilities is gaining momentum in the UK. Once the domain of start-ups, SME’s and short term contract based work, the traditional co-working concept has since morphed into a wide range of packages inclusive of managed, serviced and flexible space solutions.
As a result, the appeal has widened, with major corporate occupiers growing as adopters. The primary reason? Business planning horizons are shortening and organisational restructuring is faster and more frequent. Greater emphasis is placed on employee experience, innovation and flexibility of operations. This means that the rapid expansion, adaptation and contraction benefits of a serviced product fits with the agility required to operate in today’s fast paced business environment.
To service growing demand, acquisitions of high quality office space have increased, with flexible workspace providers broadening their attentions beyond the M25.
Growth in co-working, serviced or managed operational facilities in the major UK cities outside of central London have more than doubled in the past two years. Since 2017, almost 1 million sq ft of operational space has been acquired by national and local third party operators across this geography. This represents 8% of total take-up over this 24 month period.
This shift in occupier focus has also had a secondary effect. This combination of flexible, amenity rich real estate and tailored services to create a connected, collaborative and community rich environment, has not gone unnoticed by traditional landlords.
The strength of connection and satisfaction that the ‘customer’ has with the space is viewed as a critical component of a new real estate offer, particularly as co-working providers seek to compete for occupiers of scale through their emerging enterprise models.
Traditional landlords such as British Land, Bruntwood, M&G, L&G, Land Securities and The Crown Estate are all now active participants in this growing market.
As work changes in nature and method, so the role of the workplace will evolve to meet future needs. Flexible providers recognised this change early on, but increasingly, property owners are embracing a service orientated offer. Adaptation to a new supply side dynamic has begun.
