A survey of senior executives at global corporates has found an increasing willingness to enter into flexible work space arrangements as they move farther away from traditional leasing models for offices, embracing a trend started by digital nomads and hipster entrepreneurs.
The survey, by global property consultant Knight Frank, shows that more than two-thirds of the executives are aiming for more collaborative work environments through the use of flexible office space — in part because it gives them freedom to expand and contract at a pace that suits market conditions.
The survey, which covered 120 global corporates that together employ 3.5 million people in 230 million square feet of office space, found that although most global corporates harbour plans to evolve their office arrangements, at present only 5 percent of their current office space can be defined as co-working or flexible.
An Aim for Collaboration
Seven percent of the global corporates, though, said their flexible workspace already exceeds a fifth of thei total workspace, while 44 percent said they would reach that level within three years. Eighty percent of those surveyed said they expect to increase the amount of collaborative space they use over the same three-year timeframe.
The rise of flexible workspace among corporates is increasingly evident in the Asia Pacific region, said Nicholas Holt, the Asia-Pacific head of research for Knight Frank. “While the proportion of co-working space lies roughly between 3 percent and 8 percent of prime office stock in the major markets, the growth in this sector and the continued change in working cultures across the [Asia Pacific] region means that this number is likely to increase going forward,” he said.
Although most of the companies in the survey said “flexibility” was their key concern when considering new workspace arrangements, many also showed a greater awareness regarding workers’ need for a sense of community, happiness and productivity. An overwhelming majority — 75 percent — said they thought productivity would increase as they moved to more flexible workspaces because workers would be happier and enjoy greater well-being in such an environment.
A recent survey by flexible workspace operator WeWork seems to back the notion that flexible workspaces leads to greater productivity, with a WeWork survey covering London finding that 80 percent of surveyed member companies agreeing that co-working space had helped them increase productivity.
China’s Evolving Work Scene
Knight Frank also said that co-working spaces were “expanding rapidly” in the first-tier Chinese cities of Beijing, Shanghai, Guanzhou and Shenzhen. “Co-working space will no longer be a disruptor but a fundamental part of China’s commercial real estate market,” said David Ji, director and head of research for the Greater China region for Knight Frank. “Meanwhile, more real estate developers and international shared office operators will strategically expand their business into the co-working sector in response to the huge market demand and development potential of China’s domestic co-working space market.”
According to a report by global property consultancy JLL, total co-working and serviced office space in the Asia Pacific region soared 150 percent from 2014 to 2017. Beijing and Shanghai boast the highest flexible office penetration rate – the ratio of flexible space to overall grade A office stock – in the region, at more than 3.5 percent each, while Hong Kong ranks lowest with just over one percent.