The demand for flexible workspace is set to accelerate globally, reports Herpreet Kaur Grewal.
4 December 2018 | Herpreet Kaur Grewal
The demand for flexible workspace is set to accelerate as over two-thirds of global corporates plan to extend their use of flexible co-working and collaborative space over the next three years, according to property consultant Knight Frank.
The firm's Your Space report, published in November, surveyed senior executives at 120 global companies that collectively employ more than 3.5 million people and occupy 233 million square feet of office space - equivalent to the total amount of office space in central London.
It shows that global companies intend to operate increasingly from flexible, serviced and co-working spaces, those designed to create a collaborative working environment and allow the freedom to expand and contract quickly in line with market conditions.
Earlier this year, commercial property agent Cushman & Wakefield's research also showed that the rise of flexible workplace has been a driving factor in recent positive office performance, particularly in central London.
Across the capital alone, flexible workplace providers have taken nearly 20 per cent of office space, while competition in regional cities is intensifying. Take-up in the UK's largest cities outside of London has jumped from 2 per cent to 7.5 per cent of all leases in 2017, powered by the growth of WeWork and Spaces.
Productivity links to well-being
Despite this revolution, Knight Frank's report states that most global corporates still occupy office space on a traditional lease model. Two-thirds of those surveyed say co-working, serviced and flexible office space comprises 5 per cent or less of their current office space. A small minority, less than 7 per cent, say flexible workspace exceeds a fifth of their total workspace.
But the study shows that the proportion of flexible space within companies' portfolios is set to rise dramatically. Over 69 per cent of global firms plan to increase use of co-working spaces, and 80 per cent expect to expand the amount of collaborative space they use over the next three years.
And almost half (44 per cent) state that flexible space would constitute up to a fifth of all office space in the next three years. An additional 16 per cent estimate that as much as half of their workspace globally would be flexible space within the same time period.
Over half of companies (55 per cent) identified increased flexibility as the main driver of this change, with 11 per cent stating that the sense of community fostered among workers is the main benefit. Another 11 per cent say the greater speed to becoming operational is the primary reason for selecting co-working or serviced office space ahead of more conventional offices.
The overwhelming majority of respondents - 75 per cent - say personal productivity linked to well-being and happiness would increase as they shift to a flexible and collaborative model of occupancy that is more in keeping with today's business structures and working styles.
Dr Lee Elliott, global head of occupier research at Knight Frank, said: "A decade of global economic uncertainty has reshaped how many of the world's largest companies view workspace. Shorter business planning horizons, together with the emergence of new, more agile corporate structures has driven demand for flexible space that enables companies to react to change quickly."