Companies are finding that their workspaces are undergoing big changes in a relatively short time. Just in the last few years, flexible office space has increased almost 25%, and this growth seems set to continue. At the same time, traditional office space is decreasing.
The drive to flexible office spaces comes from the need to create a better workspace for employees. Many employees are looking for work that allows them to work from home or have flexible hours that let them work from the office and home. As a result, businesses are finding the traditional office is no longer working. They are finding it necessary to build flexibility into their entire business model when it comes to office space, business operations, and their employees.
The traditional workplace is quickly evolving and adapting to employees who increasingly want to work from home. Just what does this mean for the Coworking market? What changes are ahead?
1). Traditional Offices & The Coworking Market
Commercial office space is literally changing as you read this article. Right now, about two thirds of the commercial market has made the change to coworking spaces. This number is expected to rise over the next five years. This is due to business not renewing their current leases as they expire. Instead, many companies will choose to downside, choosing shared workspaces rather than traditional offices.
In response, landlords who currently have traditional office spaces will begin to transition their offices into serviced coworking spaces to meet demand. They’ll develop agile floor plans that include suites, which ready to move into, and coworking spaces, along with offering more flexible leases.
Landlords will see that providing flexible office solutions will increase profits, which will allow them to add more services for their tenants. In this way, the industry will transition into a hospitality business model, where businesses can enjoy a wide variety of support services, along with premium add-ons.
Landlords may provide perks that include fully stocked kitchens, beverage stations, branded coffee shops and even restaurants. Businesses will find that this change brings better brand perception, a culture of community will develop, and their clients will enjoy this new coworking opportunity.
2). Landlords Will Adapt to Larger Organisations
With the big changes coming to businesses as they leave behind traditional offices, landlords will need to broaden their business model from mostly providing services for freelancers and small business, to incorporating support for:
- Corporate organisations: usually prefer serviced offices that have private access to amenities, while gaining access to the coworking community.
- Super-flex members: these may include working parents and freelancers who are looking for a more flexible work/life balance. They will require more flexible options such as an hourly membership, virtual office services, along with access to online communities, mail services and even social events.
In addition, landlords will have to become pro-active landlords, rather than the “set it, and forget it” type of landlord. No long will a tenant move in and run their own businesses. Businesses that choose a coworking model will need business support.
As such, landlords may find they’ll need to adapt to becoming actively involved in their clients’ business by offering the business services and support these larger companies need. This is a huge jump, when they’re used to working with freelancers and small businesses, which don’t require as much support. In addition, landlords will need to provide flexible, shorter-term solutions for their business clients.
Institutional landlords, such as banks and insurance companies, are the most suited to make these changes, and develop their own brands of service office and coworking services. However, the rest of the commercial real estate market is made of smaller owners. They may find it more difficult to adjust to the growing demands for more flexible workspaces.
However, those who are already running coworking offices may be able to help these smaller landlords. They may choose to approach their landlords and offer to help fill up their office spaces. If a landlord has a proactive mindset, they will see partnering with coworking offices providers. They will find a partner who can help them make the necessary changes, while helping them to find tenants.
3). Additional Changes in the Coworking Environment
As we move forward into the new coworking environment, coworking and shared workspace provides will also find themselves experiencing significant changes including:
Remote signups & virtual tours: as corporations make the change to coworking spaces, workspace providers will need to offer self-service signups of virtual memberships, along with providing virtual tours of office premises.
Manage space for landlords: coworking service providers will find themselves working together with the landlord and managing the office spaces for their landlords. This could lead service providers to working with more than just one landlord in additional buildings or even new neighbourhoods.
Events may become more important: with clients working different schedules and days, coworking service providers will find that in-person meetings and events become more important. Plus, clients my request these services as a way to connect with other business professionals and network.
Provide bespoke office layouts: this will be more for corporate clients, who will have specific requirements when it comes to Internet bandwidth, office layout and configuration, and even office security.
Meet the needs of super-flexible clients: these clients will need more options, rather than only a virtual office. They may require a combination of working from home and working at the office for a couple of hours, which could see them in the office maybe a one or two days a week. For this reason, super-flex clients will need more flexible lease options.
Change of floor plans: the office floor plans may need to change. For example, they could be made to accommodate five or more desks, which include access to private amenities, such as phone booths and meeting rooms.
These are some of the most important changes coming up for businesses, landlords and even coworking space operators. The changes are necessary in order to accommodate employees and businesses who are increasingly choosing to work remotely, especially as we move into the next decade. There are opportunities for all businesses and landlords to benefit from these changes if they choose to work together and meet the needs of their clients.