Flexible workspaces are evolving, with the established serviced office model giving way to new co-working options. Kurt Mroncz, Managing Director at Offices iQ, explains the changing trends to Sara Bean
The past 10 years has seen a surge in the number of flexible and coworking spaces within the commercial office sector. According to a report from Knight Frank, (Y)our Space, it has grown from approximately 600 coworking spaces around the world in 2010 to an estimated 19,000 spaces globally. Meanwhile, a report by construction consultancy Bruceshaw notes that “coworking continues to impact investors, developers and end users as the concept appears to be the dominant force in the commercial sector”.
Flexible or serviced offices have in fact been around a long time. They were first popularised in the 1980s when the founder of Regus, Mark Dixon, commoditised the serviced office concept of taking whole office buildings, subdividing them and leasing the spaces out to small businesses, fully furnished and ready to rent.
What has changed in recent years is that serviced, flexible and coworking spaces are now considered viable alternatives to traditional corporate real estate. The Knight Frank report reveals that two-thirds of global corporates plan to increase their utilisation of coworking spaces, while 80 per cent expect to grow the amount of collaborative space they use over the next three years. Almost half, 44 per cent, predicted that flexible space will constitute up to a fifth of all office space in the next three years, and an additional 16 per cent believe that as much as half of their workspace globally will be in flexible space within the same time period.
WHAT’S BEHIND THE TREND?
Kurt Mroncz worked for Regus for 12 years and is now Managing Director of broker Offices iQ, which helps clients find flexible workplace memberships both in the UK and internationally. He cites the changing economic climate as the catalyst for change: “If we go back to the last downturn, 2008, what happened in effect was that organisations reduced their headcount but were left with a lot of real estate which they were committed to but not really using. From that point on, alongside a rise in digital technology that allows individuals to work from anywhere, there has been a growing interest in the use of flexible space as a real estate strategy.”
There has been a huge influx of coworking and serviced office providers within the commercial property sector. Alongside Regus, which is now part of IWG, the now ubiquitous WeWork brand has so disrupted the market that real estate giants have launched their own brands – such as British Land’s Storey – which focus on offering flexible workspace.
Finding and choosing the right kind of space among such a plethora of options can be time-consuming, however, which is where brokers such as Offices iQ step in. They help clients find flexible office and coworking space, whether they are start-ups, small firms looking to expand or large corporate organisations with complex, multinational office space needs.
Says Mroncz: “Clients may initially come to us for our database of about 10,000 serviced offices globally, but for every client we’ll do a bespoke search – which means quite often the space we’re proposing for our clients is an option which is not even known about yet on the market. The way the industry works means there is no fee to our client for anything we do, even an end-to-end service, as we get a finder’s fee. We search for the available space free of charge and will help clients decide on the space required. The client then views the space, selects the best option and moves in.”
The term coworking is often bandied about in the same breath as flexible or serviced offices, but as Mroncz explains, there are four main models.
This is the most basic of solutions, offering a client a fixed address but no physical facility. Instead there is a virtual office offering a registered office address, and other services such as mail forwarding, telephone answering and occasional meeting rooms available for rent.
Typically described in the US as an ‘executive office’, this is a dedicated office within a business centre, available on a short-term lease ranging from one month to a maximum of three years. It offers occupants a fully inclusive service, covering utilities, telephone, IT, security, cleaning and reception services. Says Mroncz: “Clients sign an agreement and pay the provider a monthly fee for inclusive services, but fundamentally, they’ve rented an office and are in a fixed space.”