The Biggest & Best Portal to the Professional Property, Workplace and Built Environment Community

Friday, 16 November

Europe Bound for 10 Million Flexi Space Square Metres

Movember's offices have been refurbished to offer flexibility to the charity's own staff as JLL anticipates Europe’s flexible office space will grow by up to 30% per

Europe’s flexible office space will grow by up to 30% per year over next five years, says a new JLL research document - over 7 millionsq.m of stock will be added in Europe by 2023, pushing the total market size to 10 million square metres.

Entitled Disruption or Distraction, it investigates the flexible office space sector and the challenges and opportunities it presents for companies, real estate investors and developers.

The research document was released on November 7. One of its headline findings is the sector has more than doubled in size since 2014 and is set to grow by up to 30% per year over the next five years.

 

Boom and shift

JLL’s research unpicks the main drivers of the sector’s boom – including evolutionary changes in how, when and where people work, shifts in lifestyle and rapid advancements in technology – and provides insights into the risks and rewards for both companies and real estate investors in Europe.

According to the research, the market is split into three types of flex space user:

  • Conservative -  low percentage of flex space in their current portfolios; zero/limited expansion planned.
  • Experimental - low to moderate percentage of flex space in existing portfolios; up to 10% and beyond in next 3-5 years.
  • Visionary - significant usage of flex space; clear and ambitious plans for widespread adoption, reaching upwards of 20% of portfolios.

 

Barriers

Barriers to flex space adoption include concerns around brand dilution, cost, security and confidentiality. But similar risks are associated with non-adoption, around staff retention and attraction, as well as being perceived as stale.

according to JLL, with over 700 flex space providers in the industry, consolidation is inevitable and a downturn would accelerate this process. The well-capitalised and experienced providers with geographical diversification will flourish, as well as innovative and niche operators providing a next-generation offer.

 

Investors

JLL also warns investors, who need to balance the need for stable long-term income with occupiers seeking flexibility, they face a number of challenges, from understanding how flexible space will impact asset valuations and market transparency, to the effect on supply and demand dynamics, lease lengths and yields. In response, some landlords and developers will consider establishing their own flex space concepts, collaborating with existing providers or looking at M&A. Landlord-initiated concepts are burgeoning in cities such as Amsterdam - where they account for 25% of all flex space.

 

Real estate shift

Dan Brown, Head of Flex Space, EMEA, JLL, said: “The rise of flex space is resulting in one of the biggest shifts across the real estate industry that we’ve ever seen. The consumerisation of real estate, which we’ve already witnessed in hospitality and retail, is reshaping business models and investment strategies alike. Our research shows how different markets and different companies are moving at varying speeds. As the dramatic growth shows no signs of slowing, companies, investors and developers must keep on top of the evolution to understand what this means for their specific business ambitions.”

Alex Colpaert, Head of Offices Research, EMEA, JLL, added: “For investors, flex space offers new opportunities for those who embrace innovation and change, yet with no one-size-fits-all approach, it’s not without its challenges. What is clear, though, is that it’s here to stay and is having a real impact on Europe’s office investment environment. Investors should look closely at what’s happening and decide on the most appropriate response for them, whether that’s adopting flexible providers into their buildings or adapting their strategies to provide their own flexible solutions.”

Picture: Movember's offices have been refurbished to offer flexibility to the charity's own staff as JLL anticipates Europe’s flexible office space will grow by up to 30% per year over next five years. With thanks to CCWS Interiors and Movember for the picture. To read the Movember Face Lift story - Click Here  

Article written by Brian Shillibeer

Share


Related Articles

Migrant Cleaners Strike At Justice - And Other Locations

Migrant cleaners are to strike simultaneously at the Ministry of Justice and Kensington & Chelsea Town Hall on August 7-9. Meanwhile, self-employed electricians are...

 Read Full Article
Mercury Rising, Straw Dogs, Hot Fuzz, Top Guns, The Crown & Vikings

We've got an FM Digest so good you'd almost want to make a movie out of it. Mercury have taken the Almac contract; Elior are eliminating plastic straws; Tenon are...

 Read Full Article
Win For City, Dictating & Docs Go Green, Cloud Award & Ward Award

The full FM Digest features catering and doc management contract wins; employee motivation; and gender pay gap reporting PLUS seven stories more.   Manchester...

 Read Full Article
Dodgy Dealings, Double Helpings And A Leicester Swoop - Anyone For A Digest?

We've got contract gains and company purchases and news of Carillion FDs under investigation and another NHS Trust setting up its own FM co - FM Digesting at its...

 Read Full Article
All To Play For And Pay For In The Enviro World

Envirotech Group Launches New FM Business; Whitbread extends relationship with Mitie; Sodexo has won an £11.2 million contract with Tyne Coast College Group and...

 Read Full Article
Healthy & Wealthy Ahoy - It's The Post-Easter FM Digest

As Sodexo says good riddance to the deep fried Mars Bar, Engie says hello to the deep blue sea - and a hydrogen fuel experiment. Meanwhile NG Bailey has bought the...

 Read Full Article
In Your Palm - All The Week's FM News

It's cold out there but we've got some great contract win stories and plenty of heart-warming charity initiatives in our FM Digest.   A Bit More Than A...

 Read Full Article
Plum Jobs and a Bit of a Tattoo

Plum Plym job Broadgate Estates has given Imtech Inviron a three year shopping centre contract at Drake Circus in Plymouth. The role includes planned and reactive...

 Read Full Article
Climate Change - Met Office Responds To IPCC

The UK's Met Office has responded to the Intergovernmental Panel on Climate Change special 1.5°C report. We also summarise the IPCC report. The long-awaited...

 Read Full Article
Stirling Prize Shortlist Announced

The six-long shortlist for the 2018 RIBA Stirling Prize for the UK’s best new building was announced on Thursday, July 19. The list of exceptional buildings...

 Read Full Article