(Y)our Space: ‘Space-as-a-service’ becomes the demand default
The rise of co-working space since the turn of the decade has been nothing short of astonishing.
3 minutes to read
The rise of co-working space since the turn of the decade has been nothing short of astonishing. Back in 2010, there were just 600 co-working spaces around the world. Nine years on and estimates suggest that there are just short of 19,000 spaces globally, accommodating around 1.7 million workers. The appeal of co-working to occupiers is as strong as it is obvious (see infographic below). It provides them with flexibility at a time when business-planning horizons are shortening and organisational restructuring is fast and frequent. It allows the rapid up and downsizing of the workplace, while its turnkey operation allows the occupier to focus intently upon core business rather than, for example, the fit-out of property. Yet while these benefits are well-rehearsed, there is a broader influence deriving from co-working that has even greater appeal to the occupier – namely, the positioning and articulation of space as not simply a fixed, physical product but rather a service which can support business growth and evolution. In our view, this will become the key occupier requirement across global real estate markets.
(Source: Knight Frank (Y)OUR SPACE Report, 2018. Sample: 129 Global Corporate Real Estate leaders).
Co-working operators place tremendous emphasis on providing real estate and associated services that support the creation of a highly connected, collaborative community housed within a modern, curated and highly serviced environment. The strength of connection and satisfaction that the ‘customer’ (note the language) has with the space is critical, particularly as co-working providers seek to compete for occupiers of scale through their emerging enterprise models. The power of this offer is so great, that traditional landlords increasingly have little alternative but to adapt to a new supply side dynamic and adopt the approach taken by these co-working ‘upstarts’. They must extend their innovation beyond the design of the physical product and towards the provision of soft-services, community and well-being. Service is what the occupier – seeking to enhance productivity through a more positive workplace experience and exposed to an alternative solution through co-working – will increasingly demand from space around the world irrespective of the supplier of that space.
Occupiers will make these demands because of their people. They must attract and retain the most talented staff. They will therefore gravitate towards buildings and locations that support them in this task. They will seek what we refer to as ‘talent magnets’ – amenity rich locations that have a buzz, vibrancy and cohesion that is compelling for talented workers. They will migrate to those buildings that have a clear brand identity and associated magnetism. They will source buildings that support wider talent management strategies via the provision of events, education programmes, temporary installations, site-specific apps and concierge staff to consistently bring substance to the brand image and deliver positive workplace experiences on a daily basis. A satisfied happy worker is a productive worker. Moreover, it is a worker less inclined to resign. In this sense, the link between people and property extends even further. Those responsible for the provision of service and affirmative workplace experiences will increasingly define the property product and determine its ultimate success.
For more insights into the dynamics shaping occupier decision making and the implications for global real estate markets, take a closer look at Y)OUR SPACE