Coworkings and serviced offices have been, in recent years, the most rapidly developing segment of the office real estate market. Today there are over 166,000 sq m of flexes in Warsaw alone. The flexibility they offer, such as the length of obligations under lease agreements, not only attracts freelancers, start-ups and companies from the SME sector, but also increasingly large companies and foreign corporations.
Short contracts, often with a one-month notice period, have proved to be the perfect solution for many companies in these unpredictable times that we now find ourselves in. Some flex tenants can simply terminate their leases while they are not using the office. However, the temporary outflow of smaller clients only strengthens the position of flexible office operators as it illustrates the value of this kind of flexibility to tenants.
Regardless of when the COVID-19 vaccine will be created (and distributed), we can be sure that when we leave our homes we will enter a completely new reality. A reality whose predictability for many months, if not years, will be limited. However, when we come back to our offices and desks, we will return to a "new standard", one which will become a milestone in the development of workplace strategy for our organizations. In turn, flexible solutions will be a key aspect in these new strategies.
Since remote work has accelerated digital transformation in many companies, we can, to the same degree, expect to see an acceleration in the implementation of flexes in business office strategies. A rapidly developing business in an economic environment with limited predictability requires flexibility. This - in the context of the workplace - may be seen by:
- concluding lease agreements with a short notice.
- an increase or reduction in the demand for office space dependent on current business needs.
- remote work from a convenient location, but not necessarily from home.
Before flexible offices return to their pre-pandemic path of rapid expansion, we can expect them to be occupied by tenants looking for temporary space in anticipation of an office move, which was planned for the near future but delayed by the lockdown. These prospective tenants for flex space will include companies that will not want to undertake long-term commitments under lease contracts in an uncertain economic environment, but which will gradually increase the share of flexible space in their portfolio. After them, will come tenants who want to limit the risk of quarantining their employees and have already been considering the implementation of small "distributed offices" located in flexes.
Adam Lis
Flexible Office Solutions Manager, JLL
