Once upon a time serviced offices conjured a less-than-inspiring image: generic, cookie-cutter cubicles and bleak rows of desks in soulless office spaces that, if you are very lucky, might not be on an industrial estate. It hardly promoted the ambitious, entrepreneurial spirit associated with the young companies and small businesses looking to take commercial space.
The sector is effectively dealing with a 30-year hangover – a reputation problem dating back to the 1980s that has taken a long time to shake off.
But now a massive transformation is in full flow. Serviced offices and co-working space are not only upping their game, they are leading the charge when it comes to being at the cutting edge of trendy design, new technology and clever layouts.
The rise of start-up culture and the rocketing demand for short-term lets has seen these spaces attract some of the brightest young companies. And as competition for space hots up, so does the pressure to be at the forefront of delivering space for the next generation.
But what does that actually look like? Free food, on-site libraries with vinyl record collections, phonebox privacy booths, bowler hat light fittings… the list goes on. But does any of that equate to being hip, trendy and cool? Is that really what tenants want? And how do landlords ensure there is a commercial viability underpinning the yoga classes and high stool chairs?
Customer experience
The first issue with creating a trendy workspace is that even if spaces are considered to be cool by some, such a subjective term is very hard to define.
Having said that, there are certainly spaces emerging that are considered to be more attractive and desirable than some of the more traditional offerings.
The Office Group, which has more than 900,000 sq ft of workspaces around the UK, is a case in point. “Ultimately, it is not very cool to try to be cool,” says co-founder Charlie Green. “What is cool to one person is not to another. But one thing is for sure, you can’t fake it. You need authenticity.”
The Office Group achieves this by starting from scratch with each new development and linking the design and aesthetic to the space to create a story.
This is something that Chris Pieroni, director of operations at Workspace – which has 80 office and co-working spaces across London – also focuses on, “We put a certain emphasis on what each of our buildings stand for,” he says. “So we pick out a key heritage feature, like the Pill Box in Bethnal Green, and come up with a design that emulates that heritage point throughout.”
But he adds it is not just about creating a certain look, but a specific vibe. “You need to integrate a feeling with the reception area, the café, the facilities so the space feels like a trendy restaurant or café.
“It is the same as the feeling you might get when you walk into an Apple store. The staff come to you, there is a service being offered. And you need that. You might have a cool, contemporarily designed building, but if you have no reception area or decent service then it doesn’t work on aesthetics alone.”
Andrew Gammage, customer experience and workplace director at business support service Interserve, agrees. He joined the company two years ago from the hospitality sector where he spent 12 years heading customer experience for Whitbread’s restaurants. He says there are more similarities between teh two sectors than people might think.
“Running an office is not much different to running a hotel. It is just that one has beds and one has desks,” he says. “Design, look and feel in isolation will not always work. You need a journey and an experience that will draw customers in to the space and make them want to stay.”
Staying connected
On top of a growing focus on hospitality in serviced office spaces, connectivity is crucial when it comes to what is needed beyond just being cool.
“Connectivity is key,” says Pieroni. “If you have rubbish WiFi then nothing else matters. Which is why we are heavily investing in a digital platform. Our customers can leave us at very short notice, and unless we get everything right – and that goes way beyond the look – then our occupancy levels would show us very quickly how cool we actually are.”
One thing is for sure, whatever it is that contributes to a serviced office space, competition is hotting up.
“There is a bit of an arms race at the moment among serviced office providers in terms of who can be the coolest and the hippest,” says Paul Bennett, director of city occupier services at Savills. “And this is all against the backdrop of questions over whether this sector will even last in its current guise.
“But while design has to go out of fashion and the definition of cool will inevitably continue to evolve and change – all of which will mean people keep having to come up with new ideas – there will always be a need for these types of spaces,” he adds. “People just don’t want to sign up for long leases anymore.”
Giles Fuchs, chief executive of serviced office company Office Space in Town, agrees that as long as the commercial value behind serviced offices stacks up, there will be demand. “Last year saw a record level of $700bn invested in global commercial and real estate property,” he says. “And while 2016 began with uncertainty in global equity and bond markets, prices for commercial property in the world’s leading metropolises is growing, as investments in the sector deliver promising returns compared to other asset classes.
“High rents and steady tenant occupancy in London have helped attract investment from foreign conglomerates looking to tap into the capital’s booming property market. We are also witnessing increasing interest in cities across the UK, with billions of pounds of commercial and residential property investment flowing into Manchester, Liverpool and Leeds.
Fuchs adds: “Demand for serviced offices in the capital has also driven the flurry of investment. The financial crisis has led more and more businesses to look for flexible office arrangements, in turn fuelling the expansion in the serviced office space, which has witnessed 25% annual growth globally and 20% in London alone.
If Fuchs is right, then the serviced offices sector looks to be on a strong upward trajectory. And as competition between modern workplaces continues to hot up, the race to stay on trend is on.
