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3
Cushman & Wakefield
The Traditional & New
The Serviced Office, or Business Centre, was
introduced in the 1980s. These spaces now
encompass Coworking as a design and workspace
solution, meeting the expectations of a young,
technology enabled workforce permeating corporate
and creative industries alike.
A Growing Market
The flexible office market is a global phenomenon,
with the number of coworking spaces estimated to
grow tenfold over the next few years. Cities such
as London, New York, Berlin and Shanghai are
developing advanced ecosystems, underpinned
by the expansion of global brands and strong
local players.
The Commercial Forces
The five key commercial forces behind this trend
include (1)
economics
and the requirement to reduce
costs and increase efficiencies; (2)
simplicity
allowing
companies to focus on their core business; (3)
location
flexibility in a period of strong demand for
commercial real estate in the CBD; (4)
growth
and
globalisation of the corporate world; and (5)
advocacy
exemplified by the uptake of flexible working by
corporates and government.
The Cultural Forces
The five key cultural forces behind this trend include
(1)
entrepreneurship
and the explosion of self-
employment; (2) the proliferation of
technology
and
the growth of digital economy; (3)
connectivity
and
collaboration enabled by technology; (4)
recruitment
and retention
in the war for talent; and (5) the growth
in professional and corporate
networks
.
Risks
Key risks include (1)
market
and supply/demand
mismatch; (2)
operator
over exuberance; and (3) evolving
tenant
requirements and behaviour.
The Regeneration Effect
Flexible Offices play an integral role in urban
regeneration, demonstrated by Kings Cross in London,
Dumbo Heights in Brooklyn, Factory Berlin and Fuxing
Plaza in Shanghai.
A Flexible Future
The flexible office sector will continue to expand and
evolve. As this happens:
• Corporates and other users will benefit by balancing
a low-cost environment with a competitive ability to
increase employee flexibility.
• Talent pools in fringe locations supported by Flexible
Office providers will attract inward investment and
increase value. Developers will respond by creating
new spaces as part of the wider place-making and
regeneration agenda.
• Global operators will expand their offers and coverage,
while new local operators will emerge especially in fast
growing cities in Asia.
This report is broken down into seven distinct subsections