Published by Maria Bichl on Dec 21, 2021
The majority of the UK’s office landlords are struggling to attract tenants in the current climate. How are they going to address this problem? By embracing flexible working.
These are some of the key findings from infinitSpace’s exclusive new research. Commissioned via a leading, independent market research agency, our survey of more than 200 UK office landlords has provided hugely valuable – and timely – insight into the challenges and opportunities they are facing at present.
Let us run through some of the headline results.
Between 4th and 14th December 2021, we quizzed 204 landlords, all of whom own between one and ten office buildings. We found that a massive 62% are struggling to secure traditional tenants right now. The number is even higher (66%) for those with commercial properties in London.
Why? Because tenants’ demands are changing, with remote and flexible working becoming more prominent during the pandemic.
Almost two thirds (64%) of landlords said they have witnessed a notable shift in the demands of existing and prospective tenants since the start of the Covid-19 crisis, with 65% saying that the rise of remote working has forced them to reconsider the layout, design and functionality of their office buildings.
Improving the tenant experience
So, what changes have been undertaken over the past two years to meet tenants’ changing demands?
More than half (52%) of landlords have added new facilities to their buildings to enable their tenants to collaborate more effectively when they do head into the office, such as additional breakout areas and meeting rooms.
Even more (62%) have introduced facilities to aid tenants’ wellbeing while in the office. Examples include gyms, meditation and relaxation spaces, and mental health support services.
Encouragingly, 63% of landlords said their office buildings have an app or online platform that tenants can use to manage their workspace and book meeting rooms or facilities – 58% said this was a critical feature for attracting tenants, which is something we wrote about recently.
All of these findings underline the pressing need to create a superior tenant experience. To attract businesses to lease a workspace, and to ensure their employees then truly engage with it, landlords need to think what services and facilities are now needed beyond desks and chairs – positively, infinitSpace’s research has revealed that most UK office landlords are doing exactly that.
We have written much about the flexible working revolution and, crucially, its implications for office landlords. Our research has really brought this topic to life.
We found that, at the moment, landlords are dedicating an average of 33% of their office portfolios to flexible workspace. That is already a healthy figure, and it is set to rise.
By the end of 2022, landlords predict that the proportion of their office space that will be used for flexible and co-working spaces will increase to 37% (a 4% rise in just 12 months). By 2026, it will hit 44%.
Landlords are clearly alert to the fact that they need to offer more flexible workspaces, given businesses are increasingly seeking out such space. Indeed, 60% of the respondents to our survey said they think having a flexible workspace within their buildings is crucial to remaining competitive within the market.
Unsurprisingly, then, almost the exact same number (59%) have begun offering shorter and more flexible terms to new tenants over the past two years.
Helping with the process
Offering flexible leases and terms is a good first step. But it is the tip of the proverbial iceberg, as landlords will know.
Creating a flexible workspace is about having the right facilities, branding, atmosphere, functionality and design features. It is about fostering human connections, empowering innovation and enhancing collaboration – the key goals that businesses have when they now meet in person.
This is not easy, of course. In fact, the majority of UK commercial landlords (51%) who plan to increase their flexible workspace offering in the coming years said they find the process daunting.
Three in five (60%) will be outsourcing the transformation and fit-out of the physical space to an expert third party. And 49% will partner with another company to operate the workspace once it is ready for tenants.
Why choose infinitSpace?
Partnering with a flexible workspace expert is, in many instances, a sound decision. It takes skills and experience to create an amazing space, attract the right tenants, and then manage operations seamlessly.
What does that mean?
Well, whether an entire building or just certain floors within it, we will convert traditional offices into modern, flexible and innovative spaces. We take care of the fit-out, layout, design and functionality – but, importantly, we work with the landlord to create a brand for that space, one which will resonate with their tenants.
Office landlords do not just hand over the keys and sacrifice all control – they maintain input into the final look and feel of their property.
We install the facilities that businesses demand, from meeting rooms and breakout areas to barista coffees and gyms. Moreover, we also implement technology that can be used by both landlord and tenant in the form of a best-in-class app. This means there can be effortless communication between all stakeholders, while also ensuring the space operates seamlessly.
And, crucially, we manage and market the workspace, finding tenants to occupy it and making sure they enjoy a superb experience.
At infinitSpace, we understand that converting traditional offices into flexible workspaces can be daunting. But as our research shows, this has fast become an essential transformation – landlords unable to offer flexible, inspiring workspaces will continue to struggle when it comes to securing tenants.
If you want to speak to us about our brand-new landlord research or to find out how we enable landlords to future-proof their office buildings, get in touch today.