OPINION: ONE year on since the beginning of the pandemic and our cities are starting to buzz again. COVID-19 accelerated trends that would’ve otherwise taken years, and for the real estate industry, it’s clearly been the way we think about office space; accelerating the demand for flexibility that we’ve been experiencing over the past decade at WeWork.
With home working stifling innovation and creativity, employee expectations of the office are shifting and the workplace has been redefined as a hub for collaboration and productivity – and workspace design needs to evolve to support this change.
Kicking off the new year, we’ve seen an increase in demand from companies who want flexibility not only in terms of space, but also in location and time as well. While the office isn’t going away any time soon, it may have a renewed purpose for collaboration, creativity and connection. The agile nature of our business model means we have easily adapted our spaces and enhanced the flexibility we offer to our members to meet the evolving criteria of what a workplace should provide.
Solving space needs
We know the uncertainty of the past year has encouraged more companies – particularly large corporates – to opt for flexible working arrangements. They’re recognising the cost-saving benefits of no longer having to predict real estate needs for 10 or 20 years’ time, as well as scaling their space up or down depending on growth.
In Australia, the drop in government public health restrictions was the most significant factor driving employers’ decisions to bring back staff, with public transport and workplace safety concerns now being more influential worries. Taking steps to prioritise health and safety has been critical in reassuring occupiers and instilling confidence. Earlier this year, WeWork’s health and safety measures were independently awarded conformity with the highest of global standards by Bureau Veritas, an internationally recognised testing, inspection, and certification organisation.
While many companies are not yet ready to make long term commitments on their future workspace needs, they may be trying to decentralise, maintain culture, attract or retain talent. Real estate decision makers or business leaders previously reliant on traditional, long term leases now have far greater understanding on what solutions are available – and they’re voting with their feet.
According to a global study by PwC, three quarters of Australians say their ideal work environment is a mix of remote and in-person working. Only 16 per cent say they’d prefer a wholly virtual workplace. That’s pushing companies — especially smaller ones — to be nimble with their office space, and co-working is proving the solution. Companies wanting to future-proof their business operations are already prioritising employee satisfaction, providing the option to work from a private office close to home, or access workspace when and where their people need it.
Quickly, leaning into short-term, flexible office space and increasing access to space through technology is allowing us to reimagine what flexibility – of time, space and location – really means even beyond what we see today.
Digitising real estate
With everyone looking for greater flexibility in where and when they work, occupiers are seeking a greater mix of workspace solutions to meet new market demands. For us at WeWork, flexibility at scale means we can offer companies looking to reduce their reliance on traditional real estate, access to over 800 locations around the world through flexible membership options at the tap of a black card.
Understanding the growing demand for optionality, convenience, and flexibility, the pandemic also accelerated a focus on leveraging technology to enhance the product of real estate. What was once a very static line item can now be viewed as something much more fluid: Physical space is being adapted and utilised in a way that brings workplace solutions directly to the consumer, with no long-term commitments, red-tape or unnecessary complexity. In this way tech functions as a tool which allows us to digitise real estate: book a workspace or a meeting room wherever and whenever you need it.
What’s exciting is that despite flex space being an incredibly fast-growing sector, it still only represents such a small percentage of office space: According to a recent market snapshot report by CBRE, market penetration rates of flex space report across Australia remain less than 3%, below the APAC average of 4.4% and less than half of London City at 7%. The thirst for flex is expected to increase as companies look to insulate themselves from future uncertainty.
With this, greater access to flexibility via subscription-based or pay-as-you-go memberships mean employers can swap longer term conventional leases for adaptable space, spread their workforce across cities, or multiple countries, and want a space that can change and grow with them. Not only should space be easily adjustable to meet the evolving social distancing requirements, but also able to provide multiple solutions to meet the individual needs of member companies and their workforces.
The product that WeWork has been offering is the type of product that this time is calling for. We’re becoming the space solution in a time that demands a space solution. Especially with our footprint, great locations, and stronger balance sheet we’re also uniquely positioned to leverage our platform and innovate on new products like All Access, and soon On Demand, to become the workplace solution for all.
By Balder Tol, General Manager, Australia and Southeast Asia, WeWork.
WeWork was founded in 2010 with the vision to create environments where people and companies come together and do their best work. Since opening its first location in New York City, WeWork has grown into a global flexible space provider committed to delivering technology-driven flexible solutions, inspiring spaces, and unmatched community experiences. Today, WeWork is reimagining how the workplace can help everyone, from freelancers to Fortune 500s, be more motivated, productive, and connected.