The Leader Magazine

MAR 2018

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Page 21 of 55

22 MARCH 2018 t H e le A de R Sean Lynch is managing director of the Asia-Pacific region at The Instant Group, a global firm based in London and specializing in flexible office spaces. Waa s in action A recent project we completed in Singapore for a global financial services firm neatly sums up the demand behind the workspace as a service (WaaS) model. The client was about to take a three-year traditional lease to accommodate its project team, but The Instant Group was able to demonstrate that WaaS was far more cost-effective. Space could be tailored to meet its specific needs, and the workspace flexed to accommodate fluctuating headcount within the lifecycle of the project. Comparative modelling of the total cost of occupancy showed the benefits between taking conventional office space and flexible workspace over the lifetime of the project. The lack of upfront, capital costs was a significant element of the client's ultimate choice to go with the flexible space. This is one example but there is now more engagement with corporate clients on "flex and core models." This incorporates a situation where it is possible to source space to accommodate a percentage of headcount that can be committed to for the term, with flex space also being incorporated into the deal. This solution can include 75 percent or even 50 percent of the total space being implemented using a flexible option, with totally bespoke design. The remaining is flex space provided by an operator or the landlord. Under this new approach, large buildings should be flexible and integrated, including networks that provide competitive advantages to customers. The end solution should be designed around the customer journey, reflecting their individual business requirements. In a departure from conventional models, the asset must be managed proactively with a customer mindset and the ability to generate demand via digital marketing. There must be a structure in place between operators, service partners and delivery partners to manage the customer experience and to maximise revenue going forward. towards a flexible-working operating model." With this evolutionary move, businesses of all sizes would be able to view the workplace as a source of value-based efficiencies and the ability to use the workplace as a basis of growth rather than as a cost. Shorter lease lengths, expansion in coworking provisions, and general "corporate" acceptance of more flexible workspace solutions are all symptomatic of a market finally accepting change in end-user demand. It is, in many ways, the CRE market waking up to the requests of the customer and diversifying the product offering to incorporate alternatives and, most critically, choice. Choice is being borne out by the diversity in offerings that are coming to the market now as flexible workspace evolves: • flexible-office spaces focused on providing choice and luxury services • fintech-specific spaces, or incubators (i.e., Accelerator and Rise, from Barclays) • women-only coworking spaces (i.e., 'The Wing' in New York City and in Washington, DC) • men-only coworking spaces (i.e., in Brooklyn, New York, and Sydney, Australia) • significant brand extensions (i.e., WeLive co-living spaces and WeGrow micro school from WeWork, and Regus Express, Signature Group, Spaces, and Open Office from Regus) a dditional forces driving Waa s With reported flexible office average workstation rates now proving more competitive, if not lower, than conventional space, a number of other advantages around flexible solutions are now starting to show their importance. Lower initial investments and forecastable costs allow a business to invest more heavily in its critical areas and allow its teams to focus on the core business. Other factors to consider include the appeal to employees of more flexible office arrangements and a variety of locations to choose from. This is particularly relevant in high-growth, developing markets, such as in Asia, where skilled, experienced labour is a valuable commodity and companies work hard to keep staff turnover low. All these dynamics make perfect sense when you look at the changing demographics of the workplace. These are firms that want to expand dynamically or maybe even contract as required, and the confines of a conventional lease simply do not allow for either possibility. But they do want brand presence; they have worked to earn that awareness and want staff to benefit from an understanding of it, particularly in new markets. This is where WaaS comes into play, as it allows for this flexibility but retains cash flow by removing the need for significant upfront capital investment and the option to introduce branded design as the client chooses. Landlords too, have awakened to the potential of this new market. According to our survey of some of the largest landlords in London and New York, more than 67 percent now view flexible space as a key part of their portfolio. However, let's not call this disruption, as conventional leases will remain. The status- quo will have moved because of the need to give the workspace customer more choice and to adapt to shifting societal and professional demands. This is innovation, not disruption, and the opportunity to re-think established modes of behaviour and commerciality. Workspace as a service puts the customer at the heart of the workplace – where they belong – and gives them services that allow them to work more effectively and according to their preferences. It's simple! C ase st U d Y F E A T U R E A R T I C L E

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