Flexible working doesn’t just mean working from home anymore
Darrell Walker, head of sales at InterBay Commercial
Our workplace and approach to work and life is forever changing and seemingly changing fast. Over the last couple of years I’ve witnessed increased requests from prospective candidates for flexible working patterns to enable them to better balance career and home life.
Essentially it seems to attract the best talent and, let’s be honest, who wouldn’t want that? Then I began to think about what impact flexibility has on our office or work spaces in the UK.
Indeed, the requirements for office space itself are changing day-by-day. Certain companies that offer flexible working no longer need the same amount of desk space they once did and instead are requiring bigger breakout spaces, fitness facilities, coffee shops and bars within the office.
Some, but obviously not all, offices with a standard layout of desks are therefore no longer making the cut and are therefore adapting to suit this change.
What’s more, standard office spaces have a new competitor, perhaps on the block, that can offer businesses these facilities: co-working spaces. They offer short-term leases for offices, sometimes for even just a week or day, that have the latest in workplace trends such as bars and coffee shops, yoga classes, or pool tables. And total co-working spaces are set to grow globally by up to 30% annually for the next five years across Europe.
Many companies, including WeWork, have a network of offices across the country, meaning you can work out of most locations in the country, just by requesting a daily workspace in its app.
Driven by the rise of technology, start-up co-working spaces first appeared in London and have since popped up across Europe. By 2023, Europe will see over 7 million square metres of stock be added, seeing the total market size rise to 10 million square metres.
Also, with SMEs making up 99% of all private sector businesses, it is essential that the market offers a flexible solution for their needs. The fast-paced nature of many start-ups and SMEs means predicting their size in the next 10, five or even two years is tricky. Finding a space with a short-term lease which allows them to grow or move in line with their needs is more appropriate for these businesses.
Collective working spaces were set up to meet the growing criteria of businesses wanting to offer their employees more than just a desk. However, some existing office spaces may not be suitable as they may not have the ability to house these new requirements.
In order to avoid missing out on opportunities, investors or owner-occupiers of office space should take heed, especially on new purchase space with this in mind. For the investor, this could mean extra financing.
What do landlords or prospective investors need to know?
There are a few things commercial property brokers should consider if your clients are looking to access capital to meet these changing workplace demands in the commercial sector. If it’s purchasing or remortgaging then you’re probably looking immediately at who offers the best rate.
If you’re thinking of renovating an existing commercial property to cater for these types of work spaces then you’ll need to consider working with a lender who has the flexibility and experience to cater for the non-standard, or in this case, the new.
Also, you’ll need to be prepared for the lender to request information about your client’s business and they may also request their business accounts and projections so they can check the longevity of the company. In addition to this, the length of the term can vary greatly, so you need to understand what your client wants from your commercial mortgage so the finance suits their business plan.
In this case, whenever approaching the new it sometimes feels like we’re approaching the unknown but essentially it’s the same mortgage process. What I would say is your relationship with lenders is crucial.
Make sure your lender has the flexibility and expertise to underwrite the new and that you supply all documentation requested in a timely manner so the case can proceed in spirit of openness and transparency and ultimately confidence.
And if you can discuss the deal at one of these new offices over a latte in the café then so much the better!