One of the most notable trends we’ve seen in 2018 has been the commercial property sector’s response to rocketing demand for flexible workspace.
At the BCA Conference in May this year, CBRE’s Kevin McCauley and James Pearson revealed that 77% of UK landlords are now looking at ways to introduce flexible space into their portfolios, and warned flexible space operators to expect some competition.
However, interest from commercial property landlords also represents an exciting opportunity for our sector.
Douglas Green, Director of GKRE (Green Kinnear Real Estate), a BCA Partner, said that GKRE has been “inundated” with requests from property companies for advice on how to deliver joint venture agreements for flexible workspace in locations across the UK.
“My view is that the successful property owners of the future will be the ones who no longer think only of generating income from property in the traditional way, ie. by granting leases,” Green commented.
In a new report, GKRE delves deeper into the future of the flexible workspace industry and explores some of the ways operators and commercial property landlords can work together.
The Future of Flexible Workspace
In addition to the well-known drivers behind the growth of flexible workspace - including technology, a startup culture, and changing corporate attitudes to flexible workspace - GKRE reveals some of the new drivers that will further strengthen the sector over the coming years:
As these new drivers continue to influence demand for flexible space in the years to come, it is highly likely that commercial property landlords will take greater interest in the sector and seek to identify ways in which they can incorporate flexibility into their own portfolios.
So what can we expect from property landlords in the near future?
According to GKRE, there are six main opportunities available ranging from DIY options through to joint ventures. In brief, these are:
“The impact on property owners is going to be profound,” commented Will Kinnear, Director of GKRE. “Office leases are getting shorter year by year and the demand for tenant flexibility is eroding the long-term security of rental income.
“Our view is that the successful property owners of the future will be the ones who no longer think only of generating income from property in the traditional way, by granting leases. Instead, they will use their property to generate income in an entirely different way, by offering space as a service, largely through joint venture/management agreements with flexible workspace operators.”Click here to download the guide in full