Global corporates ‘want flexible office space’
Two thirds of global corporates plan to increase their use of flexible co-working and collaborative space over the next three years, according to new research.
Knight Frank’s ‘Your Space’ report polled senior executives at 120 global companies which collectively employ in excess of 3.5 million people worldwide and occupy an estimated 233 million sq ft of office space, equivalent to the total amount of office space in Central London.
The reports shows global corporates intend to operate increasingly from flexible, serviced and co-working spaces, which, they says, create a more collaborative working environment and offer the freedom to expand and contract quickly according to market conditions.
The reports says that despite the proliferation of co-working and serviced office operators the majority of global corporates still occupy office space on a traditional lease model. Two thirds of companies surveyed reported that co-working, serviced and flexible office space comprise 5 per cent or less of their current office space. A small minority, less than 7 per cent, said that flexible workspace exceeds a fifth of their total workspace.
However, Knight Frank’s research reveals that the proportion of flexible space within companies’ portfolios is set to increase dramatically. Over two thirds, 69 per cent, of global corporates plan to increase their utilisation of co-working spaces, and 80 per cent expect to grow the amount of collaborative space they use over the next three years.
Furthermore, almost half (44 per cent), stated that flexible space will constitute up to a fifth of all office space in the next three years. An additional 16 per cent estimated 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 a significant proportion (11 per cent) stating that the sense of community fostered among workers was the key benefit. A further 11 per cent stated that the greater speed to becoming operational was the primary reason for selecting co-working or serviced office space ahead of more conventional office space.
75 per cent of respondents stated that personal productivity linked to wellbeing and happiness, would increase as they shift towards a new 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: “This research underlines that 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 which enables companies to react to change quickly.”
“While co-working and serviced office operators have grown rapidly over the past five years, driven largely by start-ups and the freelance economy, this is only the tip of the iceberg with latent demand from global companies set to emerge over the next three years.”
William Beardmore-Gray, Global Head of Occupier Services and Commercial Agency at Knight Frank, added: “The demand for flexibility is the single biggest threat – and opportunity – to owners of office space. The recent boom in co-working is indicative of a structural change within commercial real estate whereby companies desire space that is flexible, highly serviced and aligned within the realities of doing business in an age of disruption. Some co-working operators have capitalised on this already, but it is imperative that owners and developers react to the new reality where customer is king.”