The Leader Magazine

MAR 2019

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32 March 2019 the leader Jonathan Wright, MRICS, is director of Flexible Workspace Services/Asia for Colliers International. lounges, meeting rooms and event spaces. If the flex element is taken on a longer term, some of it could be customized and the costs amortised. This, together with a selection of the models below, can create genuine cost savings, bring flexibility, turn capex into opex, and add mobility – without compromising on densities. All of this is tangible. You can then add in the "fluffy" elements, such as community, wellness, productivity and other things, but let's leave the free craft beer, ping-pong tables and bean bags to the workplace strategists! This exhibit at left summarises some the models of flexibility that could be adopted either on their own or as a combination to optimize flexibility in a CRE portfolio. t he future of the flexible workspace sector We believe that there are three areas where the flexible workspace sector will evolve: deeper landlord-operator partnerships, amenities and premium products. Currently, flexible- workspace operators create space in a silo and place-make within their own space, which is typically leased in an arms-length transaction from the landlord. This creates a conflict of interest within a building; you essentially have two eco-systems that may not necessarily complement each other. In addition, the operator may not, in this case, add much value to the asset beyond convenient access to flexibility for occupiers of the asset and handing over a monthly rental cheque. We believe that deeper partnerships will form between landlord and operator to create genuine value-add for the user. Landlords must re-engineer their offerings to cater to the modern user that is tech-enabled and mobile, and that requires a deeper work-life integration than ever before. Landlords can work together with operators to deliver on these needs. If a landlord can offer an occupier a building that has on-demand flexibility for workspace, meeting rooms, food and beverage, wellness, event spaces and lounge areas – all connected by tech and well-designed to a corporate standard – then the occupier's employees will benefit from the space as an experience and, in theory, should be more productive and comfortable in the work place. This then makes the building more attractive and more valuable to the landlord. Our research also suggests that 3 percent of CRE is dedicated to amenities. We believe this figure should be as much as five times higher to really embrace the office of the future. The landlord, in partnership with an operator, can place-make at a greater scale to deliver a curated experience for occupiers and add value for all parties involved by putting the user first. Finally, we believe the deal structures around this will begin to resemble hotel agreements and, in turn, the physical product will be elevated beyond today's current offering. Below summarises some of the models of flexibility that could be adopted either on their own or combined to optimize flexibility in a CRE portfolio. Areas where the flexible workspace sector will evolve: • Deeper landlord-operator partnerships • Amenities • Premium products

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