Kurt Mroncz, managing director of flexible and serviced broker Offices iQ, reports the revolution in office design
Edited by Cathy Hayward
Waking up, you sign into a co-working app to book a desk for the day. It’s a Friday, so you pick a site close to home. Once at your desk you book a meeting room on your phone for your video-conference call, then have a chance encounter with a new business colleague in a collaboration area.
While this sounds like a working day for a funky startup, space to support flexible working such as co-working, serviced offices or managed space are now being adopted by corporates across the globe. Typically the preserve of freelancers and start-ups, blue-chips are being tempted by stunning office design, functionality and hospitality, the chance to outsource non-core business activities, and save significant sums on office leases. Not only that but 89% of people in research from HSBC consider flexible working to be the biggest motivator for productivity in the workplace. Deloitte, Bank of America, Mastercard, Philips, Deutsche Bank, Nasdaq and many other corporates all use serviced and flexible office space as part of the property portfolio. Earlier this summer, HSBC signed a deal to take more than 1,000 desks at WeWork in two sites in London. Facebook has signed agreements for entire buildings from WeWork in California and London, while catering firm ezCater leased a space for 750 employees in Boston with WeWork. KPMG recently took desks at Clockwise in Glasgow to sit alongside tech-focused fast-growing businesses with the aim of both supporting – and learning from – this community.
Social and security factors such as providing catering, as well as being open much longer hours than traditional offices, means additional hospitality and security challenges in a corporate space
The shift comes amid a ‘perfect storm’ of challenges, with uncertainty around Brexit, ongoing tensions between China and the USA, and the IMF’s downgrade of global growth forecasts – German factory orders, for example, are at their lowest in over a decade, according to Destatis, the German statistics body. All of these factors are contributing to organisations being reluctant to commit to long-term leases.
These challenges have underpinned a surge of interest in the flexible workspace sector:
- In 2018, Savills reported a 150% rise in the take-up of UK serviced office space, and, at 20%, the serviced office provider sector accounted for the greatest proportion of City office take-up in Q1 2019, according to Savills Research.
- WeWork plans to raise as much as $4bn in debt over the next few months to accelerate growth ahead of its initial public offering, according to the Wall Street Journal.
- Corporate and enterprise organisations are engaging with flexible space consultancies and brokers, such as Offices iQ, to source flexible space around the world.
Initially, many of the buildings used for the first serviced office spaces in the 1990s, run by existing operators, were fairly tired, often in uninviting locations and mirrored their corporate counterparts in terms of design and amenities. But in the past decade, with the increasing desire for flexibility, corporates’ willingness to pay a premium for it, and the consequential rise of Spaces, WeWork, The Office Group, Knotel, BE Offices and others, design has come to the forefront. Now the serviced office sector boasts some of the best workplace designs in the market with a vast increase in the range of creative workspace, incorporating unique designs and furniture solutions, and space planning to facilitate productive collaboration.
Co-working spaces have led to some corporate workplaces, with their more traditional look and feel and lower levels of investment, being compared unfavourably to their flexible counterparts
This has led to some corporate workplaces, with their more traditional look and feel and lower levels of investment, being compared unfavourably to their flexible counterparts. Many organisations have seen the gap and, concerned about recruitment and retention, and low levels of productivity and engagement, have introduced the serviced office sector’s design trends into their own buildings.
We’ve seen the increasing densification of space through the removal of dedicated desks and introduction of high employee desk-sharing ratios; more hot-desking; the increasing use of collaborative areas, from cafes and booths to huddle space, often to as much as 25% of lettable area; the introduction of quiet spaces whether that be single-person booths for calls or acoustic pods; and further domestication with cushions, rugs, books, plants, lamps and ornaments now commonplace. From a situation 15 years ago where the only places to work were desks or meeting rooms, people can work, play and chat in a huge variety of spaces.
But in recent years, many organisations have gone even further. Not content with bringing the higher design standards from the flexible office world into the corporate workplace, they have introduced co-working concepts in their own organisations, attracted by the cross-pollination of ideas and innovation that co-working can bring.
Telecom company Orange created its own co-working space, Villa Bonne Nouvelle in Paris, which is open to both its in-house programmers and engineers and external freelancers. The idea was that its people could learn from those outside of the company. The concept – which Orange calls ‘corpoworking’ – worked, with productivity and satisfaction rising, and the opposite occurring when employees returned to the corporate office.
According to Gabor Nagy, research program manager at Haworth, and Greg Lindsay, senior fellow at NewCities, in an article in Harvard Business Review, organisations create their own co-working spaces for two reasons. Some perceive it as a brand-building opportunity, so they’ll open a co-working space to spread their brand and learn from local freelancers and other organisations. The authors call this concept Open Houses. A good example is Mini in Brooklyn, which has a combination of co-working space, cafe, concept store, and fabrication lab that the local community can drop in to.
The other reason is more targeted and involves creating internal co-working spaces in their own buildings where teams from one company are invited to co-locate with teams from another. These Campsites, as the authors term them, are more temporary and enable people to collaborate across corporate restrictions.
Both of these types of spaces aim to foster innovation, transform the experience of occupiers and act as a spur for the organisation to therefore transform its working culture, and future-proof the organisations that created them. And they all look quite different from the standard office. Everything is flexible. From the whiteboards to the furniture and event walls, everything can be moved to suit the purpose of the occupants. Kitchens and bathrooms are carefully designed and positioned to ensure maximum opportunity for serendipitous meetings with people from different functions and environments. The spaces are also far more casual than typical offices, with people writing on the walls and lying on the floors. They’re very outcome-focused, and about as far from presenteeism cultures as it’s possible to go.
But there are practical issues to consider for organisations that turn over part of their space to a co-working model, particularly around occupational density. Typically, fire escapes and staircases are designed for one person per 6 sq m in England and Wales. But space used for co-working is much more densely occupied than this. This has put pressure on buildings’ mechanical, electrical and plumbing capabilities. Air-conditioning, toilet and shower facilities, and lift capacity may be insufficient on busy days, which is leading many space designers, where possible, to increase what’s needed in corporate offices that have adopted more flexible co-working facilities.
Just as the growth of serviced and flexible office space is disrupting the conventional commercial real estate market, it’s also challenging the world of office design. As these new spaces grow their market share and continue to morph into new and different models, organisations based in traditional offices will need to keep apace if they’re not to lose the war for talent and productivity.
Labs House, Holborn
By Moxon Architects
A newly formed double-height atrium is a crucial spatial intervention, and draws natural light into the open plan entrance, which accommodates lounge seating and designated desk spaces for co-working. Image credit: Moxon Architects.
The latest example of high-end co-working spaces is LABS House in Holborn, London. The 80,000 sq ft scheme, designed by Moxon Architects in collaboration with Od Interiors, sees the redevelopment of the existing Bupa House on Bloomsbury Way into a nine-floor co-working space with a combination of private and public member areas. It has a capacity of more than 1,700. The public areas feature a restaurant, two bars and working lounge, while the private members’ co-working areas feature 34 meeting rooms, 108 cellular offices, two members bars, an event and presentation space, as well as numerous open-plan collaborative workspaces and private phone booths. The growing Holborn campus will allow large communities to collaborate in one of the most iconic areas of London, while realising the company vision for urban communities built with technology, innovation and people at its core.