“The Future of Work.” The bold statement printed across the front of the website homepage of WeWork, an American company gone global with the mission to revolutionize the way people work. WeWork targets entrepreneurs, smalls business, freelancers and startups by creating custom workspaces that are designed to offer more than standard cubicles.
Common features in their buildings include natural lighting, spacious common areas, free refreshments, onsite WeWork staff, and lighting fast internet. However, the innovation of the company is really in how they’ve changed the function of office space by creating a space for networking opportunities to link creatives and business professionals across multiple industries all under one roof. A variety of leasing terms are available whether you need an individual desk a few times a month, or a private office housing 100 employees for the next year.
As of now, WeWork has established seven locations in cities across Germany, France, UK and Netherlands. According to a recent Financial Times article, WeWork “agreed to lease 280,000 square feet in Two Southbank Place, close to Waterloo station, from property developers Almacantar, the latest step in a London push that has involved opening 14 locations in two and a half years.” This is the largest leasing agreement London has seen in 2017, and an illustration of the disruption flexible offices are having in European real estate.
“The World’s Broken Workplace,” an article by The Gallop World Poll, reported last month that “only 15% of the world’s one billion full-time workers are engaged at work. “It continues, “[millennials] place ˜my job’ equally or even ahead of ‘˜my family’ as their dream. So because their life is more focused on work, they need to draw more from their work environment. They have their best friends at work — including best friends who are customers. They want meaningful work and to stay with an organization that helps them grow and develop.”
WeWork’s goal is to create this type of work environment where professionals are more engaged and are excited to show up for work. However, developers, leasing agents, brokers and investors involved in office space should concern themselves with the changing tastes and requirements of the rising workforce to stay competitive. Fitch Ratings released an analysis that predicted a potential 25 percent decline in the overall valuation of London’s office market over the next 10 years as flexible offices draw workers away from the central business district.
The same Financial Times article goes on with, “[WeWork] made a play for the corporate market, housing departments of groups such as Microsoft, KPMG and Axa.” As major corporations begin to hop on the trend, not only does it validate the new emerging market, but it also draws in the interest of others hoping to place themselves nearer to these major businesses.
“Flexibility is the driving force today for choosing a dream workplace,” says Keith Knutsson of Integrale Advisors. The future of work is still being written. However, it is clear WeWork and other companies offering flexible office spaces are growing to be disruptors in this marketplace because they are keen to the consumers. Investors should see this trend not as a threat, but rather as an opportunity.