Real ideas, Real people - Corporate Occupiers
Welcome to our inaugural bite size thought leadership blog aimed at corporate occupiers!
Real estate has always been at the heart of Lewis Silkin and a core part of our real estate practice is focused on advising corporate occupiers. In these updates, we will share our deep experience in this area in a down-to-earth way, focusing on commercial issues with the occasional legal nugget! The first few will look forward with our predictions for 2020, starting with the ever so popular trend of co-working. I hope you enjoy these and if there are any particular topics you'd like to see please let me know.
Co-working: Believing in collaboration rather than competition
2019 saw huge changes to the world of office work. WeWork and other flexible workspace providers have clearly been busy flooding into London to accommodate the needs of companies that require more agile and creative set ups. Flexible working has become undoubtedly popular as companies now see creativity, brainstorming and innovation as paramount.
This greater need for flexibility has created a new sphere of space sharing and shorter-term leases often akin to service agreements where a fee is taken for not only rent, but other services including use of meeting rooms, printing and copying.
It has been said that flexible space will make up 30% of a corporate occupier’s portfolio by 2030. The drivers are well-known: modern businesses (especially but not only the tech, creative and start up sectors) want modern space. They also want vibrant and fresh design, which encourages collegiality and creative working and which aligns with the needs of their modern workforce. And with all this they want that space in a modern package - short-term flexibility (with the ability to share) with added value services for all-in-one financials. This demand is of course disruptive, and the market has shifted to accommodate the demand.
It appears that 2020 looks set to be much the same with businesses continuing to seek out flexible office arrangements. This constant evolution will however come with certain challenges:
- There is widespread recognition that co-working requires careful thought and real investment – not least on how space is designed, fitted out, used and managed to give businesses and staff what they really want (which gets ever more difficult);
- There is the continued tension for some occupiers between their business requirements and the disruption to traditional staff working patterns and environments and that tension will only continue as the workforce changes and new technologies emerge; and
- Traditional landlords are adjusting their offerings with new layouts and floorplate designs and an increase in mixed use developments where flexible office space is combined with amenities and residential elements creating all-in-one environments - ostensibly (at least) to optimise flexibility and work life balance.