Article | Adaptive Spaces
Flexible office space and the role of Property Management
06 Jun 2022 4 Minute Read
CBRE’s latest EMEA Office Occupier Sentiment Survey finds that flexible office space remains an essential component of many companies’ long-term real estate strategy, thanks to many of the continuing trends driving occupier demand for flexible space such as the emergence of hybrid working and the role of the workplace as a tool to attract and retain talent. As a result, occupiers are doubling down on reducing long-term fixed commitments in favour of space that provides them with the flexibility to swiftly expand and contract when needed to accommodate business needs.
Property management is taking on an essential role in meeting this rising demand for flexible space and the challenges that this creates; including flex space design and density, the impact of flex on building operations and the new skillsets required to staff flex spaces.
Whilst landlords might already be aware of the variety of flex space operating models available to them, including signing traditional leases, forming joint ventures and profit shares, entering into management agreements, and establishing their own platforms, it is important to identify what is the appropriate operating model for each occupier, as when it comes to flexible space, it is not a ‘one size fits all’. Depending on the model adopted, this could present a new set of challenges and opportunities for landlords and property managers.
More owners are exploring management agreements with specialists to deliver a flex offering. CBRE’s latest EMEA Flex Market Report shows that some providers of flexible space are finding that management agreements allow for faster growth, with less capital expenditure and less highly-leveraged balance sheets. This model can also mitigate the risk of leasing space to a potentially unstable flex space operator while leaving responsibility for day-to-day operations to more experienced providers. Partnering with a skilled operator can provide landlords with valuable insights into what’s happening within their building and help provide tenants with a better level of service.
The competitive world of flex means landlords and service providers must differentiate their offerings by providing the agility and amenities that can create value for landlords while driving productivity for employees. CBRE’s latest EMEA Office Occupier Sentiment Survey highlighted that sought-after offerings include tech-enabled concierge services, food and beverage, conferencing facilities and dry-cleaning as well as wellness focused amenities, isolation pods and single meeting rooms. Property managers are acting on implementing richer and more diverse programs, whether on single and multiple floors, in common areas or even in an estate or campus environment.
As flex space operates at a higher density than traditional office space, with many buildings being open around the clock, it can put considerable strain on resources on building hardware, maintenance, and security. Structural engineers and property managers will need to increase collaboration to create strategies that help to reduce the strain on building systems.
Due to flex space being now an essential component of a long-term corporate real estate strategy, landlords will need to assess various flex operational models and formats as they prepare to introduce this feature into their portfolios. By drawing on property managers’ expertise, landlords can avoid many of the common mistakes when considering how to cater to tenant demand for flex space, while capitalising on the multitude of benefits created by including this most essential building amenity.
To explore our experts Top 10 Recommendations for Landlords Considering Flexible Space Solutions, read the full report here.