Flex Office Operators Look to Unlock the Suburbs

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The adoption of remote work around the world highlights the flexibility and proximity to home that suburban markets can offer. Britain, until last year the world’s largest flexible office market, could provide a test case for how coworking and serviced offices respond to a changed post-COVID environment.

Andrew Butterworth, commercial director at British workspace developer Bruntwood Works, noted that customer inquiries have picked up most rapidly at the company’s properties in the regional towns around Manchester, rather than its four city center markets. “That’s not what was happening pre-COVID,” he said in a recent webinar hosted by the UK’s Flexible Space Association.

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A number of clients that were previously seeking large amounts of space in the cities are now considering splitting up their operations to have a mix of space close to their employee’s homes, reducing the need for commutes. “I think that bespoke approach is going to become part of people’s portfolio mixes,” Butterworth said.

Another data point was provided by Jonny Rosenblatt, co-founder of flexible workspace platform Spacemade, which launched a new location in the Queen’s Park suburb of North London at the start of July. “It has absolutely flown,” he said. “We are signing people up every day.”

Large corporate entities that need space for full teams are among the customers drawn to the building, dubbed The Loft, which offers remote worker passes as well as fixed desks and private studios for teams of up to 12 people. Spacemade, which operates about 100,000 square feet across three British cities, is now at about 20 to 25 percent occupancy across its portfolio, with occupancy increasing each week as the UK begins to loosen its strict lockdown rules.

The UK has a total of 4,563 flexible office locations, according to a 2019 report by The Instant Group. In another study, the workspace innovation specialist found that 35 percent of office deals in London last year involved flexible office operators.

Shifting from the center

“I think the opportunity that exists now is for flexible providers to develop a product,” said Rosenblatt. Private offices that are reserved for one year at a time have their value, he added, but going forward “you need to be able to offer people a network of spaces because actually they’re not always going to come to that one individual office.”

Customers are going to demand a variety of spaces for quiet, focused work, project teams, client presentations, events, one-on-one sessions and other uses, he added. “I think the usage of the single workspace by a company is going to become less of a focus, and there will be some evolution into something slightly less centralized.”

Rosenblatt and Butterworth agreed that technology can help by telling customers where spaces are available. Bruntwood, which has a portfolio of some 120 office buildings across four cities, offers a mobile app that enables customers to book spaces, from meeting rooms to wellness facilities, and is designed to foster a sense of community.

The developer recently rolled out a new service, called Office Share, that allows businesses to partner and share workspaces on a rotating basis, with each firm occupying the space for two or three days in a given week. The company said the COVID-era initiative is designed for firms that plan to continue working from home but still need office space for employees to gather at certain times, as well as companies that need to reduce overhead.

“All our space is being redesigned and re-space planned based on the new environment where we’re working with reduced capacity,” noted Butterworth.

Justin Harley, regional director at Yardi, who also joined the webinar, added that smart home devices like Amazon Alexa and Google Assistant could prove useful in flexible office spaces by providing reception and helping customers book rooms.

“It’s frictionless and it’s contactless,” he said.