What is Flexible space?
Flexible space typically means workspaces that fall outside of the traditional ‘office’ model. This can be co-working spaces, serviced offices, or liquid space.
How are businesses incorporating flex space in their real estate portfolio to mitigate risk?
Flex space gives businesses access to fully equipped offices without requiring a long-term commitment, making it a go-to solution, especially during times of exponential business growth or market uncertainty. Benefits include the ability to expand and contract real estate commitments as needed – with flexible month-to-month terms to 60-month agreements. From a cost perspective there are also substantial advantages compared to those of a standard lease, with a model that removes fixed upfront costs and shifts focus to variable costs per desk/headcount/usage. Incorporating flex space as part of your real estate portfolio allows you to create more adaptable strategies that can align with your priorities and risk levels while avoiding long-term and/or cash intensive commitments.
How are businesses in HK and APAC using flex space to support their teams during the pandemic?
COVID-19 has forced every industry to re-evaluate its priorities. With many unknowns, decision makers are preferring to maintain the status quo and optimize financial and operational resources. Alongside this trend, many are taking a refreshed look at workplace strategy and flexibility around hybrid work and A/B teams. Flex space allows organisations to establish a secondary location/BCP site to cater to split teams when a “work from home” policy is not a viable option. Incorporating flex space into their real estate portfolio allows companies to efficiently adapt to changing circumstances, with fit-out customisations and immediate CAPEX and cost savings also available. In Hong Kong, we are seeing flex space operators expand alongside demand growth, with recent examples including 8 Queen’s Road East (IWG - Spaces), 28 Stanley Street (TEC), Chinachem Tower (The Hive) and 9 Queen’s Road Central (WeWork).
Tell me about serviced offices
Serviced offices are typically more formal and corporate in nature. They tend to house businesses and established teams. Serviced offices usually provide occupants with telephone access, internet, and mail services as part of a monthly package. Some also include access to business equipment like copiers, AV equipment, and office furniture. Increasingly, however, we’re seeing new serviced offices adopt concepts and designs commonly associated with co-working, such as communal spaces.
How is co-working different?
There is a greater focus on creating a sense of community in co-working spaces. They prioritise networking and shared resources among tenants, and normally provide more amenities than serviced offices. Co-working spaces often have livelier, more dynamic and interactive environments to encourage innovation, which attract a greater number of entrepreneurs, freelancers, and smaller start-ups.
What are the advantages of co-working or serviced offices?
The amenities provided by operators can assist occupiers in differentiating themselves in a competitive employment market, particularly when it comes to attracting and retaining young talent. Being part of a community gives occupiers access to an established network of digital technology and apps, and can create cross-selling opportunities between businesses within an operator’s ‘eco-system.’
The short-term contracts associated with these spaces also offer headcount flexibility for project or sales teams that are looking to expand or consolidate their operations, not to mention reduced upfront capital expenditure and reduced deposits.
What are the implications and opportunities for MNCs looking to embrace flexible space?
Our research suggests that MNCs in Asia Pacific are starting to explore the benefits of flexible space. Inspired by the amenities offered by co-working providers, some larger companies are looking to create their own modern workspaces that can meet the specific needs of their staff and clients in terms of design, technology, headcount growth, and more.
Others are choosing to partner with existing operators to house a percentage of their staff at established sites, by taking up a fixed number of desks or creating a small satellite office within a co-working space that can offer staff flexibility.