When businesses – and commercial property owners - think about flexible workspace, they tend to think of one thing: short-term commitment.
However, many aren’t aware of the additional benefits that go with it. These include reduced risk, the ability to scale up and down reactively, and the opportunity to be more sustainable.
For commercial property owners thinking about transforming their properties into flexible working space, these benefits are worth knowing about too.
One of the major attractions of flexible workspace is that it offers office space to suit different business needs, from entering markets abroad to keeping operations going in times of crisis.
When a business is expanding into a different country for example, flexible workspace can offer a more cost-effective alternative to investing in permanent office space, which may have to be sold again if it doesn’t work out.
Choosing flexible workspace allows businesses to sign and extend contracts, and to end them if required. In this way, they help businesses to achieve their strategic objectives, whilst also reducing the costs associated with growth and expansion.
Tailored office space
When looking at how flexible workspace can fit into a company’s overall strategy, it’s also important to remember they are completely customisable.
Businesses can effectively design their own office, without the heavy costs typically incurred in conventional leasing, mainly office fit out. This is particularly true in New Zealand which has some of the highest costs of construction in the world.
Beyond the initial investment required, the risk of depreciation write off if the company does not use the fit out they invested for the full 10-year depreciation schedule can be enormous. This is something that businesses are trying to avoid more and more.
For example, Europe is expected to see 255 million sq ft of flexible workspace in 2019, a 12% increase compared to last year, according to research done by Instant Offices.
Even in comparatively smaller markets, flexible workspace is becoming a dominant trend in commercial property use.
In New Zealand, IWG expanded from five sites totalling 6,500m² in September 2017 to 17 sites with 27,000m² just 24 months later, representing 400% growth.
Supporting this trend is the general shift towards flexible working and its projected economic benefits.
In New Zealand in 10 years’ time, flexible working is expected to add between NZ$16.2 billion and NZ$18.1 billion to the economy and to create between 74,000 and 83,000 additional jobs.
Having the ability to customise flexible workspaces allows businesses to design their offices in a way that offers maximum efficiency and is consistent with the company’s wider branding and marketing messages.
A sustainable solution
According to research conducted by Nielsen, 81% of consumers feel strongly that companies should be implementing strategies to help tackle key sustainability issues.
Businesses need to react by demonstrating they are acting in a responsible and sustainable way.
Rather than companies investing in permanent commercial spaces, which may be too large for their needs, they opt to work alongside other businesses, maximising space in already built up, central city locations.
Also, when looking outside of cities at suburban locations, flexible workspaces also help to tackle climate change by reducing commute times between home and office.
By choosing to operate from these locations, businesses can reduce their impact on the environment.
Finally, flexible workspace offers a practical solution for companies by avoiding the unexpected downtime caused by extreme weather, or other disasters.
Events such as these can be costly for businesses, especially when it forces the closure of main offices. This can have dramatic consequences on productivity and a business’ bottom line.
Flexible workspaces can help minimise such losses by offering a space from which business continuity can be guaranteed, despite unexpected events that are out of a company’s control.
As flexible workspaces become more prevalent in today’s business world, it’s important to take note of the fact that it’s not just the short leases that make them a favourable choice of office space.
The flexibility offered goes far beyond this and provides many different benefits, touching all parts of a business, from marketing and finance, to overall strategy and crisis management.
*Alexander Sykes is the New Zealand country manager for IWG, which is the multinational owner of a suite of workspace companies including Regus, Spaces and BizDojo.