Demand for flexible office space set to dramatically increase, research reveals

The demand for flexible workspace is set to accelerate as over two thirds of global corporates plan to increase their use of flexible co-working and collaborative space over the next three years, according to new research from Knight Frank.

Knight Frank’s (Y)OUR SPACE report surveyed senior executives at 120 global companies which collectively employ over 3.5 million people and occupy an estimated 233 million sq. ft. of office space.

(Y)our Space by Knight Frank

The research reveals they plan to significantly reduce their number of traditional leased offices and operate increasingly from flexible, serviced and co-working spaces, which create a more collaborative environment and offer the freedom to expand and contract quickly, according to market conditions.

Flexible workspace is defined as workspace that is furnished and ready to use – complete with everything needed to facilitate work straightaway including WiFi, a receptionist, meeting rooms, technology and equipment.

Patrick Matheson (Partner at Knight Frank Newcastle), said that some North East landlords are ahead of the curve having already started converting their offices into flexible and collaborative spaces.

He comments: “The Greydient @ 71 Grey Street, The Pearl on Northumberland Street and NEON at Quorum are good examples of landlords developing collaborative space within their offices to meet this changing occupier trend.”

“The likes of WeWork and other co-working operators haven’t committed to Newcastle as a location to open co-working operations yet, but the thriving tech/digital scene we have here gives us the right platform and I’m sure if one of these did come to town they would do well.”

Today, despite the proliferation of co-working and serviced office operators, the majority of global corporates occupy offices on a traditional lease model. Two thirds of companies surveyed reported that co-working, serviced and flexible office space comprise 5% or less of their current office space.

However, the research reveals that the proportion of flexible space within companies’ portfolios is set to increase dramatically.

69% of global corporates plan to increase their use of co-working spaces, and 80% expect to grow the amount of collaborative space they use over the next three years.

Furthermore, almost half (44%) said that flexible space will constitute up to a fifth of all office space in the next three years. An additional 16% estimated that as much as half of their workspace globally would be flexible space within the same time period.

The drivers

What are your reasons for opting for flexible/collaborative workspaces?

  • 75% said they believe it would increase personal productivity – linked to wellbeing and happiness
  • 55% said it gives increased flexibility
  • 11% state it would increase the sense of community amongst workers
  • 11% said greater speed to becoming operational

The North East

Paul Lancaster (Founder of Plan Digital and Newcastle Startup Week) says it is a demand for vibrant, buzzy, collaborative, high-spec workspaces that is driving forward this trend in the North East.

“Managed workspaces are not new. Places like PNE’s North East Workspace, North East BIC, TEDCO and Regus have been around since the 80s or 90s” says Paul. “They’re great places but they’re traditional, serviced offices where companies usually work in their own spaces, behind closed doors. They are often out of town and difficult to reach without a car.”

“What we’re seeing is people wanting to be part of a vibe. They want to be amongst other like-minded people and innovators, bouncing ideas off each other in high-quality, boutique-style-décor, collaborative spaces. They see the Google and Facebook offices of Silicon Valley and they want a slice of that. And they want to be in city centres, within walking distance of entertainment and shopping,” says Paul.

The war for talent

Paul continues: “The global war for talent is definitely a thing. That ever-increasing competition for winning the best employees for your business is strongly behind why companies are moving towards higher quality, contemporary, flexible and collaborative workspaces.”

“Top class people are no longer willing to relocate for a job – it’s now a case of taking the job to the talent, which is where short-lease flexible, co-working offices come in. If that person is in high-demand for their skills then they don’t settle for mediocre, bland, traditional, working-in-silos, offices on the edge of town. Absolutely not.”

The flexible scene

The North East’s journey onboard this global trend was highlighted in what is known as ‘The Auxin Report’ back in 2016. This research, commissioned by Newcastle and Gateshead Councils, looked at the region’s digital sector and explored what the councils could best do to help the development of the digital sector with a particular focus on workspace provision.

One of the upshots of the report was the revealing of the tech community’s desire for modern, shared workspaces with a community vibe and short-term, affordable leases that allow them to expand and contract as needed.

Campus North was, of course, the first proper co-working space in Newcastle and fulfilled that brief for around five years until closing its’ doors earlier this year.

Paul Lancaster, who was originally a sponsor and supporter of Campus North whilst at Sage and then Tech North (now Tech Nation) before becoming a tenant when he started his own Plan Digital business in 2016, said:

“Campus North was Newcastle’s first generation of co-working space and people loved it for its community feel, city centre location, flexibility and affordable price. It was the perfect home for freelancers and early stage tech and digital startups. But although it will be sorely missed, it wasn’t right for everyone with some people demanding the community vibe but with an even higher quality environment and also more follow on space that they could grow into as their business grew.”

“The fact that 71 Grey Street is almost at full capacity from the outset shows the demand is there for high quality, flexible and collaborative workspace for fast-growing and ambitious startups and established SMEs, and highlights just how vibrant the tech and digital sector is in Newcastle these days.”

The future

Hanro is one of the first North East property developers to take the baton and run with this changing occupier trend.

Hanro has invested £2m in transforming 21,000 sq. ft. of offices at the prestigious, central Newcastle address of 71 Grey Street and has incorporated communal, networking spaces.

Communal space inside The Greydient @ 71 Grey Street, Newcastle upon Tyne

Erin Peart (Head of Property, Hanro) said: “What we really want to do is create a buzz in the building with scaleup businesses who can be complementary to one another.”

“On the second floor of the building the firm is offering shorter term leases in smaller spaces, alongside longer leases on other parts of the building, offering a great mix of options for occupiers.”

She said: “Rather than try to swim against the tide, this is a building where we are happy to accept that the more flexible we are with leases, the more demand we will have from occupiers.”

To sum up – 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.

Whilst it’s tech, digital and gaming companies that are at the forefront of this vogue, professional services firms are now making-up ground and, as the Knight Frank research shows, global corporates have cottoned-on to its benefits too.

  • 69% of global corporates plan to increase co-working & flexible workspace over next three years
  • 44% believe flexible workspace will comprise up to a fifth of all corporate workspace
  • 75% aiming to boost employee happiness and productivity through business space

A version of this article first appeared in the December 2018 issue of Northern Insight magazine and you can read a scanned version here.

Innovation Districts (or Clusters)

The geography of innovation is shifting. To find the innovative economy twenty years ago, a worker needed to drive to a secluded research park, work in isolation and keep ideas secret.

Today, proximity is everything. Workers want to be in urban places that are walkable, bikeable and hyper-caffeinated where they can bump into other workers and share ideas. This video explains why.

Sage extends Campus North / Ignite sponsorship for 2nd year!

One of the things I’m most proud of from my time at Sage is securing sponsorship for the Campus North co-working and event space for startups in Newcastle. Thank you Geoff Phillips (Head of Marketing) and Paul Cairney (Head of Brand) for agreeing to pay for this for the 2nd year in a row!

“Leading business software company Sage has renewed its sponsorship of Campus North and Ignite (‘the UK’s top pre-seed accelerator programme’) in a move that helps support Newcastle’s growing reputation as one of the UK’s premier hubs for tech startups.

Based in Newcastle-upon-Tyne, over 4,000 people have visited the 10,000 sq. ft. Campus North co-working and events space since opening in May 2014. Since then, Campus North has established itself as a key component of the North East’s vibrant startup scene, becoming the premier destination for tech startups, developer meetups and networking events.

Sage was one of the founding sponsors of Campus North when it opened its doors in 2014, providing a £10,000 cash injection for events and business community development. Sage staff have also provided ongoing marketing support and mentoring at Campus North and Stephen Kelly (CEO, Sage Group plc) even gave his first public talk and Q&A there in March 2015 to an audience of students, entrepreneurs, investors, enterprise professionals and academics.

The extended sponsorship sees the UK’s only FTSE 100 software company strengthen its ties with Ignite and Campus North with a further £12,000 cash injection. Sage will also make more of their in-house experts and developers available for mentoring, masterclasses and to share the knowledge gained from supporting millions of small businesses around the world.

Comments on the announcement

Lee Perkins (EVP & Managing Director of Sage UK & Ireland) said: “Without doubt the North East is one of the best places in the UK to start a business. We have world-class Universities, people and ideas and we’ve seen first-hand how those ingredients can create amazing businesses with the right support.”

“Campus North is a fantastic initiative that is not just inspiring the next wave of entrepreneurs, it is a focus for the thriving entrepreneurial community and a place where people can come together to share expertise, insights and ideas. That open collaborative mind-set is one of the things that sets the North East startup scene apart and is one of its greatest strengths. Supporting and enabling that cross-pollination of thinking is something that everyone at Sage is immensely proud of.”

Paul Smith (Campus North / Ignite100 Co-founder & Director) said: “Sage has been a true partner of Campus North since the beginning and I’m excited about the opportunity this extension creates for the entrepreneurial community. Together, Sage and Ignite100 are helping to build a true Northern Powerhouse on the UK start up stage.”

[VIDEO] Thoughts on the Newcastle tech start-up scene, Shell LiveWIRE & Government initiatives

In this interview for TechBritain last year, I talk about the Newcastle tech start-up community, explain what the Shell LiveWIRE youth enterprise scheme is all about and touch on the national Government’s support for start-ups in London and other parts of the UK.

Co-working comes to Newcastle

I’ve been championing the idea of co-working in Newcastle since April 2011 when a tour of the ‘Silicon Roundabout’ area of London reinforced my belief that ‘clustering’ (close georgraphical proximity to other businesses and entrepreneurs) was an important ingredient in the success of a startup (see ‘Start-Ups: Know Your Place’).

This trip, which included visits to TechHub, Hoxton Mix and an exclusive interview with Moshi Monsters/Mind Candy CEO Michael Acton Smith (below) is what made me start hosting weekly events for developers, designers and start-up founders at PNE Group’s PostOffice building on Pink Lane.


My original idea, which I first mentioned at SuperMondays in April 2011, was to have regular co-working days and evening events at the PostOffice but for various reasons (mainly a lack of time and resources) they didn’t begin until 3rd August 2012 (see http://plandigitaluk.com/2012/07/12/postoffice-venue-launches-weekly-co-working-days-in-newcastle/). Instead, I decided to focus on turning the PostOffice into a hub / focal point for grassroots developer and designer user groups, starting with our first event with PHPNE on 21st June 2011. Watching these events grow in size and number to over 50 people some weeks has been one of the most fulfilling things I’ve done in my professional career, although most of the credit needs to go to the leader / organiser Anthony Sterling as I’m merely providing the space for them to call home.

The success of PHPNE has attracted other user groups to the PostOffice, like Design Interest (which celebrated its 1yr anniversary at the venue this month), Ruby North East, Javascript North East, Python North East and one off events by UX North East, the Final Cut Pro user group and the first ever public pitches by the teams on the ignite100 tech accelerator programme. In fact, one of the great things about the ignite100 programme is that not only are they discovering and investing in exciting new start-ups but they’ve also opened up their super-cool office, ‘The Loft’ @ Adamson House on Westgate Road for co-working with desks available to rent at an affordable price (email paul@ignite100.com to find out more). To see what other events are coming up at the PostOffice, you should Follow us on Twitter @PostOfficeNE1 and ‘Like’ our Facebook Page www.facebook.com/PostOfficeNE1.

Unless you’ve been to one of the events it’s hard to describe but having a regular place that the local dev / tech community can call home, offering an informal and relaxed environment, in a handy location right next to some good pubs, is part of the reason why local people now regularly talk about what a great ‘community’ there is up here in Newcastle and the North East. There are many other factors which add to this which I outlined in my recent overview of the North East tech start-up scene but it shouldn’t be sniffed at as it’s a very real and magical thing.

We’re now doing monthly co-working events at the PostOffice on the first Friday of the month (at the time of writing our next one is on 2nd November and tickets can be bought for £10 at http://postofficenov.eventbrite.com) which again are reinforcing my belief that modern day business is all about working and collaborating in a more social (real-life) environment.

In addition to the PostOffice, I’m very pleased to see that Newcastle Business Village have recently opened a fantastic, full-time co-working space at Clavering House, behind Central Station where you can work in a great environment for just £15 per day (see video below). As the North East’s biggest advocate of co-working, Jayne Graham (Space On Tap / Colleagues On Tap) deserves a lot of credit for the input and advice she has given the team behind Clavering House, helping them to create the type of place that I plan to start working from occasionally and where I would urge you to give it a try yourself next time you’re in Newcastle.

Welcome to Sunderland, Software City

Sunderland Software City, the organisation that exists to generate and promote a sustainable, world class software industry in the North East of England, is moving to a brand new, state-of-the-art building next to Sunderland Museum and Winter Gardens called ‘Software City’.

Just a few minutes walk from Sunderland Metro station and the main shopping streets, Software City is a stunning new building situated on the corner between Toward Road and Tavistock Place, overlooking the beautiful Mowbray Park Victorian gardens.

The new building is really impressive, with several ground floor event spaces (including one with a reinforced floor designed with car launches by nearby Nissan in mind), a range of different sized offices and a co-working space for freelancers and startups to use on a drop-in or membership basis.

The large atrium and reception area will have wi-fi throughout making it an inviting place to work and hold informal meetings with clients, but there are also private meeting rooms available including one with ‘white board walls’ that will record what you wrote on them and allow you to load it back up again at a later date! There’s also a small cinema room, a breakout room complete with beanbags and another with a one-way mirror for businesses to use to watch and film focus groups of people using their products or services.

Atrium @ Software Centre

Reception / meeting area @ Software Centre

The large, open plan room in the far left hand corner of the ground floor is to be a co-working space that will provide easy access, low-cost deskspace for individuals or teams with innovative new ideas for a startup. Inspired by places like TechHub, Google Campus and White Bear Yard in London, it’s expected that this will be available to use on a daily (pay-on-the-door), monthly or annual membership basis.

Rooftop terrace @ Software City

Outdoor area and bike racks @ Software Centre

I’ve been extremely impressed with Sunderland Software City in the short time I’ve known them (particularly their Chief Executive, David Dunn who is full of ideas and enthusiasm for the North East tech scene). So if you’re an individual, new startup or existing software business looking for world class support to help you grow, I recommend you contact the team at info@sunderlandsoftwarecity.com, call them on 0845 872 8575 and/or Follow them on Twitter @SunSoftCity

You can also see more photos of Software City and listen to short interviews with David Dunn on the new Betarocket website at http://www.betarocket.co.uk/2012/08/26/who-would-live-in-a-house-like-this/

PostOffice venue launches weekly co-working days in Newcastle

After talking about bringing co-working days to Newcastle since April 2011, I’m pleased to announce that we are finally going to start doing them at our PostOffice venue in Newcastle every Friday, starting with a FREE launch event on 3rd August (9am-5pm).

The PostOffice also has a new Facebook Page at www.facebook.com/PostOfficeNE1 to go with the pre-existing Twitter profile @PostOfficeNE1. Please help spread the word by sharing the press release / information below as widely as possible and attending yourself if you can by booking your FREE ticket at: http://postofficelaunch.eventbrite.com

PostOffice @ 5 Pink Lane, Newcastle upon Tyne

[PRESS RELEASE]

‘PostOffice’ venue launches weekly co-working days in Newcastle

PostOffice, the venue for weekly, after work events for North East based developers, designers and tech start-ups, is to start hosting daytime co-working events every Friday starting on 3rd August.

Inspired by his visits to co-working spaces like TechHub and Google Campus in London, Newcastle-based entrepreneur and digital marketing expert Paul Lancaster (aka @lordlancaster) has spent the past 12 months trying to build a community of similar, like-minded people in the North East by opening the doors of the venue to local developer and user groups every Tuesday evening.

Situated on Pink Lane (directly opposite Newcastle Central Station), the former old post office is owned by local enterprise agency PNE Group (aka Project North East) who have been supporting small businesses since 1980 and have helped that part of the city become known as a Tech Quarter once dubbed ‘Silicon Alley’ by offering low-cost workspace and high speed internet since the 90’s.

The PostOffice now plays host to weekly, after work events by PHP North East, Ruby North East, Javascript North East and Design Interest which are ran by volunteers (including Lancaster) for the sole purpose of promoting collaboration, ideas and skill sharing in the North East.

Lancaster said ‘Around 100 people in total now come to the PostOffice events with a great deal of crossover between the different user groups which has led to some interesting collaborations and ideas for new projects including a design-themed conference planned for August’.

‘Apart from giving people the chance to learn something new in a relaxed, informal setting, the events are as much about spending time with your friends and peers with the conversations that take place afterwards in the nearby Town Wall and Forth pubs being an important aspect of the community feel which is apparent in the North East tech scene right now’.

Co-working is a concept that has been around for a while now, particularly in the US and London but Lancaster feels that it’s only recently that technology has made it truly possible for people to do it and still feel like they are being just as productive, if not more so than being sat in a traditional office.

He said, ‘the nature of my work (website management/digital marketing) means that I can literally work from anywhere with a Wi-Fi or 3G signal and in fact do a lot of my work on the move through my smartphone. You see people working in coffee shops but they’re not really suitable and there’s a limit to how long you can realistically stay there without upsetting the staff and fellow customers.’

‘Co-working is the modern way to work and brings an added benefit to participants by providing the space for serendipitous conversations and networking opportunities which a traditional office worker or home worker would usually miss out on.’

The format is simple. Co-workers bring their laptop / tablet, phone and business cards, and we provide the space, inspiring people and free coffee from our neighbours @PinkLaneCoffee. The launch event is free to attend but tickets must be booked at http://postofficelaunch.eventbrite.com

If people would like to know more about the co-working days or evening events that are taking place at the PostOffice, they should Follow them on Twitter @PostOfficeNE1 or ‘Like’ them on Facebook at www.facebook.com/PostOfficeNE1

Downloads:
[PRESS RELEASE] PostOffice venue launches weekly co-working days in Newcastle
The Journal (25th Aug 2011) – Co-working offers the best of both worlds