Guest blog by, Julian Cooper, MD, Clarendon

In recent months, the way we view space has changed radically. How organisations approach corporate real estate leases has already begun to evolve. Many are considering moving towards a ‘hub-and-spoke’ approach in which central offices are scaled down and satellite offices allow shorter commutes and greater flexibility for employees.

While the number of leases being signed by flexible workplace operators has, unsurprisingly, decreased in the past months, the sector has remained relatively stable. In the same period, the amount of grey space available for sublet has vastly increased.

Rather than disrupting trends, the pandemic has accelerated the progression of corporate real estate practices to a more resilient and flexible approach. With increasing demand for flexspace as organisations recover and regrow, businesses will jump on the opportunity to dip their toe into the industry, by converting existing buildings into flexspace or subletting newly vacated floors.

A flexspace ‘revolution’

The flexspace sector was growing at a steady rate pre-pandemic, and while growth has been stunted recently, it will likely sky-rocket in the coming year if predictions of its role in recovery prove correct. As such, operators and landlords must adapt and innovate to stay competitive.

By the end of 2019, there were over 6,000 dedicated flexspace centres across the UK, the number having grown by seven percent over six months. This has already led to diversification to create value in the market. But it must be noted that some flexsible spaces were deemed gimmicky in their early days for offerings that brought little to the workplace beyond a trendy atmosphere. Tenants know what the market has to offer and differentiation must come in the form of truly valuable offerings.

Flexspace niches

Flexspace offerings should be just as varied and specialised as their potential tenants. There are many flexspace operators beginning to specialise in various sectors. Targeting a smaller audience can be an ideal way to enter the market, but doing so requires significant customer research. Businesses looking at utilising flexspace are considering factors that include location, cost, amenities, design, culture, and added extras.

Flexspace uses the concept of ‘space as a service’ so service provision is a vital part of any offering, in large and smaller flexspace settings. What this looks like should, again, depend on the customer. Providing extended hours and weekend openings may be in great demand as people try to avoid rush hours post-Covid. Help desks, regular cleaning services, networking opportunities, independent mental health support, and free fruit, biscuits, tea and coffee can all add value. Whatever is included in a flexspace offering, rapid and high-quality customer service can make or break a business relationship.

Disrupting the old, connecting the new

Subletting existing space as flexspace can enable businesses to attract SMEs that can create networking and partnership opportunities. Shorter term leases offer flexibility to landlords as well as tenants, giving them the opportunity to find organisations that they will build a strong working relationship with. It’s also a great use of vacant space for businesses that may have buildings below occupancy for quite some time as people continue to work from home.

Self-contained units that have traditionally been let on a multi-year basis can be great options for landlords to convert into flexspace. Demand is strong for spaces ranging from 1,000 – 5,000 sq ft and can be a valuable flexspace commodity.

Innovation and resilience will be the defining features of the pandemic recovery so any flexspace operator should approach the market with this in mind. Part of the success of the sector has been in disrupting traditional practices. The growth of the sector has not been driven by surface-level changes to current offerings. Rather, it has streamlined the corporate approach to using space.

Flexspace comes into its own in periods of uncertainty, so for all the challenges, the pandemic may leave the sector stronger than ever. Standing out in the market will require constant innovation and growth which will in part be guided by tenants.

Working closely with tenants on a day-to-day basis will guide landlords through where they can improve and add value. For those just starting out, working with a specialist can help you to find a niche and create a service provision that stands out. There is no better time than now to branch out into the flexspace sector.

About the Author:

Julian Cooper was a co-founder of Clarendon in 1998, where the company started in Clarendon House, Oxford. As managing director, Julian continues to expand the brand and the network of centres. Today, Clarendon operates centres across London and the south. Julian takes a key role in many aspects of the business but particularly enjoys sourcing and opening new sites and has great input into the layout, design and style of the centres. In 2020 Julian helped launch two new flexspace services: Claro works with landlords who are looking to add a flexible provision to their building or portfolio, and Orient helps businesses find the perfect flexspace.