CBRE Research Examines Landlords’ Response to Flexible Workspace Demand

CBRE Research Examines Landlords’ Response to Flexible Workspace Demand

Following on from its detailed investigation into European flexible office markets in November 2017 - ‘The Flexible Revolution’ - CBRE is continuing its research into the sector by taking a closer look at how commercial property landlords are responding to demand for flexible space.

Entitled ‘UK Landlords & Investors Embrace the Flexible Revolution’ (June 2018), CBRE surveyed their own clients to better understand how traditional owners of large office buildings across the UK intend to react to the flexible revolution.

Key findings:

  • There is widespread acceptance that the ‘flexible revolution’ in office space is here to stay. 
  • 92% of the survey agree that flexible office space is on the brink of becoming mainstream, and only 8% believe it to be a ‘fad’.
  • To landlords, the biggest perceived benefit of flexible space is an increased ability to retain occupiers as they grow and contract.
  • On the flip side, the biggest perceived barriers are landlords’ lack of experience with regard to running flexible office space. There are also concerns over disruption to existing cash flows, valuations, and asset liquidity.
  • 77% of survey participants are currently considering some form of flexible space provision and when asked in what time frame, 79% declared an intention to act within the next 12 months.
  • As for the type of provision, landlords are generally aspiring towards a more sophisticated flexible offer with a threefold increase in co-working space.
  • Geographically, there is a preference for flexible space in London and the bigger cities. However, nowhere was considered off limits.

Of particular interest is that 38% of respondents are considering their own brand of flexible office space. However, a larger proportion (49%) are more likely to use the skills of others either by partnering with existing flexible workspace operators, or leasing space to these providers - both of which present huge for flexible space operators seeking expansion opportunities.

This latest research report continues the main themes presented by CBRE’s Kevin McCauley and James Pearson during BCA Conference 2018, which took place on 15th May. During their presentation, the two speakers revealed that although traditional landlords have been a little slow to join the flexible revolution, they are now making up for lost time.

“Landlords are assessing and considering their options,” noted Kevin. “In many cases, they view flexible space as a complement to their existing portfolios. Our findings show that 77% of UK landlords are now considering using flexible space - so expect some competition!”

Download the full CBRE report here

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