Whilst workers may no longer need to go into “The office”, it doesn’t mean that they won’t want to go into any office.
With commuting out and remote working in, we will continue to see a boom in out-of-town flexible workspaces. Coworking is projected to account for 12.5% of commercial real estate by 2023, with the highest levels of recent growth in regional areas such as the North West and Midlands.
But what does this mean for your business?
WHAT THE HUB?
The hub-and-spoke model means that an organisation has a centralised location (i.e. the ‘hub’), with a range of strategically-placed smaller offices in more regional locations.
“The truth is, big companies have been doing hub-and-spoke for a while now,” says David Cairns, CBRE Senior Vice President, Office Leasing. Whilst the ‘hub-and-spoke’ model may not be new, the pandemic has certainly accelerated the shift for businesses of all shapes and sizes towards this decentralised model.
Adopting this model means that companies would be downsizing the city centre office space due to a reduction of it’s centralised workforce. The hub acts as the cultural centre of the business in a core location (city-centre) which acts as a central centre of the business, whereas the distributed network of small offices are usually based on talent and client demands.
WHEN WILL WE START TO SEE THE SHIFT
We’ve spent waiting and wondering what long-term impact the pandemic will have on commercial real estate, but is the shift to regional areas one trend we can be sure of?
If the past three months have made anything clear, it’s that workers want more flexibility from their workplace. To attract and retain top talent, organisations are offering employees more choice, shorter commutes, and a better work/life balance. And the data supports this.
BizSpace, the UK’s largest provider of regional flexible workspace, has reported increasing demand from companies looking to base their staff in outside major city-centre locations. Equally, UK office space rental agency, Free Office Finder, has reported a 45% increase in requirements for offices outside of the M25 since May, almost double the rise in demand for central London offices.
SHIFTING YOUR STRATEGY
Flexible offices are allowing employers to test the waters of the hub-and-spoke model before committing to a longer-term arrangement. As the vaccinations roll out and lockdown begins to ease, the trends strongly suggest businesses are looking to relocate out of central London to reduce travel, reduce the risk of the spread of infection and provide more flexibility.
To cater for the ‘hub-and-spoke’ model, landlords need to transform a portion of their property portfolios into “hubs” focused on meeting and collaboration. Occupiers will be looking for high quality, super connected office space for the hub, whereas spoke offices should provide drop in spaces to stimulate productivity and cater for remote collaboration.