...unless....
I've spoken about the increasing number of WeWork sites closing, and if there’s anything to be learned from the demise of this former flex powerhouse, it’s that occupancy is everything. Without people coming through the door and using your space, there will not be the money to pay rent, staff, or continue to improve your product.
Though the data highlights the positive opportunity around shifting to flex, it risks dramatically oversimplifying the situation. The rising demand for flex space has dominated the narrative in the world of commercial real estate sector over (at least) the past five years, so it would be easy to take occupancy for granted. But as demand has increased, so has supply. This naivety sees landlords taking a low revenue space, slapping the label of flex space on it, and waiting for the money to come in: the ‘if you build it, they will come’ mentality.
You need to provide your occupiers with the highest quality service from the moment they decide they want to book a workspace all the way through to leaving the building at the end of their day.
According to The Instant Group’s latest research, occupancy rates within “quality, amenity-driven, and service-led space” are the highest in the market – 82% across the UK and 84% in London. This means premium spaces that charge, on average, 12% more than a standard flex space, are still seeing higher occupancy than those lower-cost spaces.
For me, this is indicative of a maturing flex market. Whereas previously occupancy was dictated by location, location, location, today we are seeing a more discerning customer base choose their flex space based on quality, quality, quality. It’s less about cost-cutting and more about investing in a workspace – if you’re going to be sat at your computer for hours, wouldn’t you rather it be somewhere with comfy seats and good coffee?
I know that I just said location is no longer everything, BUT it does play a part in the decision-making of a potential customer. Prime location for a workspace is no longer limited to The City of London. It is important to consider that the city centre workspace and satellite space occupiers have different demands, for some the best location is one not too far from home and with good parking and for others it might be having a gym on site and unlimited coffee so they don’t have to pay the prices of Starbucks and Pret!
Post-pandemic, occupiers are realizing they don’t have to travel hours to go to work though working from home 5 days a week can limit productivity as a team. By looking at FlexSA’s list of operators on their website, it’s clear that satellite locations are just as important as those in the city centre.
The question then is, how to deliver the quality experience that is expected in your location. Of course, the fit-out of a space is a clear indicator of quality, and look, feel, and functionality can give a space a premium feel.
But tech underpins the entire experience.
It is important to consider the entire user journey: How do people access the space, book facilities, and communicate with their community managers and fellow workspace members? Is the Wi-Fi fit for purpose? Are the meeting rooms equipped with virtual conferencing tools? How are the networking opportunities, exclusive offers, and upcoming events being promoted to members?
A robust digital infrastructure, both at the back end and customer-facing, is key in elevating your physical flex space to an exceptional user experience. It also allows you to access the data of how your space is being used so that continuous improvements can be made.
Operators can have all the knowledge, but without the right technology to underpin their spaces, their occupancy levels will suffer.
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