editorial team
The demand for flexible workspace is set to accelerate globally, as over two-thirds of multinational companies plan to increase their use of flexible, co-working and collaborative space over the next three years, according to new research unveiled by Santos Knight Frank, the Philippines’ leading real estate service provider.
(Y)OUR SPACE, a new report by Knight Frank on workspace occupier solutions, surveys senior executives at 120 global companies which collectively employ over 3.5 million people worldwide and occupy an estimated 22 million sqm of office space, or more than four times the size of Metro Manila’s prime office market.
While most global corporates occupy office space on a traditional lease model, research reveals that the proportion of flexible space within companies’ portfolios is set to increase dramatically.
Flexible, serviced and co-working spaces create a more collaborative working environment and offer the freedom to expand and contract quickly in line with market conditions.
Key findings of the report:
- Two-thirds of companies surveyed said co-working, serviced and flexible office space compose 5% or less of their current office space.
- 69% of global corporates plan to increase their utilization of co-working spaces, and 80% expect to grow the amount of collaborative space they use over the next three years.
- 44% stated that flexible space would constitute up to a fifth of all office space in the next three years.
- Over half the companies surveyed identified increased flexibility as the primary driver of this change, with a significant proportion stating that the sense of community fostered among workers was the key benefit. Other companies reported that the greater speed to become operational was the primary reason for selecting co-working or serviced office space ahead of more conventional office space.
- Three in every four global corporates said personal productivity linked to wellbeing and happiness would increase as they shift towards a new flexible and collaborative model of occupancy that is more in keeping with today’s business structures and working styles.
New workspace in the Philippines
More than 110 co-working locations are now operating in Metro Manila. The industry has seen unprecedented growth over the last two years driven primarily by the need for flexibility.
Meanwhile, larger companies have ventured towards flexible workspace albeit that they are corporates that have been implementing the shift globally.
Rick Santos, Chairman and CEO at Santos Knight Frank says, “Flexible workspace is a ‘sunrise idea’ in the Philippines. While a number of multinational companies with local offices have converted to flexible workspace to increase productivity, the concept is yet to be adopted by most local corporations. This presents local pioneers with a vast opportunity to reap the benefits of an optimized workplace.”
Dr. Lee Elliott, Global Head of Occupier Research at Knight Frank says, “This research underlines that a decade of global economic uncertainty has reshaped how many of the world’s largest companies view workspace.”
“Shorter business planning horizons, together with the emergence of new, more agile corporate structures have driven demand for flexible space which enables companies to react to change quickly.”
“While co-working and serviced office operators have grown rapidly over the past five years, driven largely by start-ups and the freelance economy, this is only the tip of the iceberg with latent demand from global companies set to emerge over the next three years.”
William Beardmore-Gray, Global Head of Occupier Services and Commercial Agency at Knight Frank says, “The demand for flexibility is the single biggest threat and opportunity to owners of office space. The recent boom in co-working is indicative of a structural change within commercial real estate whereby companies desire space that is flexible, highly serviced and aligned within the realities of doing business in an age of disruption. Some co-working operators have capitalised on this already, but it is imperative that owners and developers react to the new reality where the customer is king.”
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