The demand for flexible workspace is set to accelerate as over two thirds of global corporates plan to increase their use of flexible co-working and collaborative space over the next three years, according to new research by Knight Frank.
Shishir Baijal, Chairman and Managing Director, Knight Frank India said, “With changing perceptions of office, the workplace is now being looked at as an environment that needs to be managed and optimised. It is being viewed as an instrument that could drive a dynamic and vibrant culture of corporate productivity impacting financial, cultural and environmental ethos of the organisation.
The co-working phenomenon is gaining wider acceptance with the mainstream Indian occupier as big corporates today constitute approximately 50% of the overall client roster.”
Knight Frank’s (Y)OUR SPACE report, published on Monday, surveyed senior executives at 120 global companies which collectively employ in excess of 3.5 million people worldwide and occupy an estimated 21.65 million sq. mt. (233 million sq. ft.) of office space, equivalent to the total amount of office space in central London.
The research shows global corporates intend to operate increasingly from flexible, serviced and co-working spaces, which create a more collaborative working environment and offer freedom to expand and contract quickly according to market conditions.
Today, despite proliferation of co-working and serviced office operators, a majority of global corporates occupy office space on a traditional lease model. Two-thirds of companies surveyed by Knight Frank reported that co-working, serviced and flexible office space comprise 5% or less of their current office space. A small minority, less than 7%, said that flexible workspace exceeds a fifth of their total workspace.
However, Knight Frank’s research reveals that the proportion of flexible space within companies’ portfolios is set to increase dramatically. Over two thirds, 69%, of global corporates plan to increase their utilisation of co-working spaces, and 80% expect to grow the amount of collaborative space they use over the next three years.
Furthermore, almost half or 44% stated that flexible space will constitute up to a fifth of all office space in the next three years. An additional 16% estimated that as much as half of their workspace globally would be flexible space within the same time period.
Over half of companies (55%) identified increased flexibility as the main driver of this change, with a significant proportion (11%) stating that the sense of community fostered among workers was the key benefit. A further 11% stated that the greater speed to becoming operational was the primary reason for selecting co-working or serviced office space ahead of more conventional office space.
An overwhelming 75% of respondents stated that personal productivity linked to wellbeing and happiness, would increase as they shift towards a new, flexible and collaborative model of occupancy that is more in keeping with today’s business structures and working styles.
Dr Lee Elliott, Global Head of Occupier Research at Knight Frank said: “This research underlines that a decade of global economic uncertainty has reshaped how many of the world’s largest companies view workspace.
“Shorter business planning horizons, together with the emergence of new, more agile corporate structures has driven demand for flexible space which enables companies to react to change quickly.
“While co-working and serviced office operators have grown rapidly over the past five years, driven largely by start-ups and the freelance economy, this is only the tip of the iceberg with latent demand from global companies set to emerge over the next three years.”
Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, Knight Frank has more than 18,170 people operating from over 523 offices across 60 markets.