Five steps for establishing flourishing flex office spaces

3 min read
Published: 14 Jun 2023 12:1

The increasing adoption of hybrid work models and an emphasis on adaptability have accelerated the demand for flexible workspace across the capital. While traditional offices are struggling to attract tenants in the wake of Covid-19, two thirds of London’s flex office space is more than 80% occupied.

What tenants want from their office space has evolved, transforming the commercial real estate market. For some landlords, partnering with an external provider skilled in managing serviced flexible offices offers a more strategic approach than self-management.

By adhering to the following five steps, these partnerships can navigate the complexities of management agreements and establish flourishing flexible office spaces.

1. Expertise is key

The flexible workspace model requires a unique set of skills and knowledge to effectively manage and operate. Operators must not only manage the physical workspace but also oversee a wide range of services, such as IT infrastructure, meeting-room bookings and community-building activities.

Staying ahead of market trends and evolving tenant expectations is vital for success. Leveraging the knowledge and expertise of operator industry veterans can provide valuable insight into best practices and innovative solutions, helping landlords differentiate themselves in a crowded marketplace.

2. Beware of hidden fees

It is essential that both landlords and operators ensure the compensation structure outlined in the management agreement is reasonable and fair. This requires a careful review of fees and charges related to services such as rent collection, maintenance and repairs, preventing either party from being overcharged.

A well-drafted management agreement should clearly outline the services provided by the flexible office operator and the corresponding fees. A shared-pain-shared-gain model often aligns both operator and landlord to deliver the best outcome for both parties.

3. Do your research

Even with operators on hand, landlords should not be complacent in their approach to running a flexible office. Before entering into a management agreement, it is crucial that property owners have a clear picture of what they want from their building and the costs and potential pitfalls involved.

By taking the time to engage in dedicated sector research, landlords put themselves in good stead to fully appreciate the terms of a management agreement and partner with the operator best suited to their needs.

4. Establish realistic KPIs

Setting mutually-agreed-upon deliverables can help maintain a strong partnership and foster collaboration. Key performance indicators (KPIs) serve as a reliable method for tracking progress, measuring success and identifying areas requiring improvement.

With specific KPIs in place, both parties can set realistic goals and collaborate towards achieving them. Regularly monitoring these indicators allows both parties to adapt strategies, improve services and create thriving spaces.

5. Market fluctuations

It is essential for management agreements to be designed with flexibility and resilience in mind. Adaptable terms and conditions can help both parties navigate periods of economic uncertainty.

Proactively developing contingency plans helps both parties navigate periods of market instability, contributing to the resilience of the partnership and ensuring its long-term success.

Simon Eastlake is managing director of Office Space in Town