GLOBAL growth has stimulated relatively vigorous leasing activity, particularly in Europe, the Middle East and the African region, according to the latest Global Prime Office Occupancy Costs report published by CBRE, commercial property and real estate services adviser.
In South Africa, a stagnant economy, however, has stifled the office space market. The office and other related sectors desperately need renewed investment activity to drive occupier demand. Moreover, the load shedding has created panic among investors, and the anticipated commitment to inject further capital into commercial property projects has been restrained.
The soft nature of the commercial property markets provides occupiers with an ideal opportunity to re-evaluate their portfolios. This includes the ability to inject more flexibility into lease commitments and to enhance the use of space through improved workplace strategies and employee experience.
Landlords need to be realistic on pricing and offer alternative solutions to occupiers. These could include flex space options and the ability to expand and contract with the fluctuation of the business.
“Return to the office for several corporates is already underway. But with the widespread adoption of hybrid working, many companies are considering the degree of flexibility needed to enhance employee productivity and connectivity,” said Joanne Bushell, MD, IWG, South Africa.
Hybrid working helps improve productivity while creating a more sustainable way of working for both people and the planet. Employees want a good mix of remote working and work from the office. The demand is increasing, especially for environmental, social and governance, ESG-compliant offices, or green buildings. This trend is likely to emerge as companies primarily opt for flexible working patterns post the pandemic.
Flexible workspaces
Flexible workspaces enable occupiers to choose efficiently designed office solutions catering for individuals wanting co-working areas or small offices to large corporates seeking to reduce occupancy costs and enhance collaborations. These workspaces offer basic furniture and amenities such as reception services, Wi-Fi, and meeting rooms. These offices were traditionally located mainly in city centres. But many companies are now looking for offices closer to their workforce in the suburbs.
Bruce Abbot, JLL Business Development Manager, said corporate tenants and office occupiers are looking for greater flexibility across their occupied real estate. Tenants need greater flexibility not just on less space or shorter lease requirements but also on the actual space and service required. This can vary from traditional desks to team collaboration areas. If these are offered within a flexible work environment, tenants benefit from this flexibility. “We find that landlords and investors are adapting to these needs,” Abbot said.
Working with IWG means landlords can access in-depth knowledge gleaned from managing customers ‘ebb and flow’ and the peace of mind that they can leave day-to-day workspace admin to IWG’s dedicated team. It’s this kind of flexibility that firms are seeking in today’s climate. Similarly, landlords that partner with IWG benefit from a proven track record, strong ROI and the benefit of the company’s 30 years of expertise in operating profitable flex-space locations.
Landlords re-evaluating their property portfolios in the coming months would be wise to ensure they are transitioning from their pre-pandemic set-ups towards offering facilities and services that truly reflect how people work today. As demand grows for flex-space closer to employees’ homes under the roll-out of hybrid working, there are fresh opportunities to invest in this future-facing commercial real estate sector and enjoy its dynamic growth as it continues to flourish.
Hub-and-spoke model
“We continue to see extraordinary demand levels in hybrid working solutions as evidenced by our strong growth throughout 2021. Last year was incredibly successful for our franchise partnerships, as more businesses committed to hybrid models. As this growth continues, we look forward to adding thousands of locations to our network, bringing asset-light hybrid working solutions closer to where employees are based”, added Bushell.
The growth of IWG’s franchise network has been mainly concentrated in suburban locations, emphasising the demand for workspace solutions in the heart of local communities. The increasing popularity of the hub-and-spoke model, with one central headquarters and smaller supporting offices, is a crucial driver for this.
For companies, the hub-and-spoke model makes it easier to distribute a workforce. It also reduces fixed real estate commitments, enabling employees to work in a modern, professional, well-equipped environment. The benefits of this model extend further, with employees experiencing a reduced commute, allowing them to spend more time with family and boosting local economies.
The think big opportunity here is to strive for better collaboration beyond a default network. The opportunity is not just about learning to collaborate across physical distances; it’s also about reaching out across teams, time zones, cultures, and working styles.
