Guest Blog: How the Serviced Office Sector can Realise its Potential in 2022
This year has brought its fair share of ups and downs for the serviced office sector. The uncertainties created by the pandemic have certainly had an impact on performance – this is especially the case given that half of British workers are still choosing to work from home for at least some of the time, and due to the need to uphold health and safety measures such as social-distancing and adequate sanitisation within the office.
It has been difficult for some serviced office providers to bounce back from the effects of Covid-19, particularly for those with a traditional leasehold model such as WeWork – a method which does not allow much flexibility for development. At the same time, compared to other workspace models during the pandemic, flexible workspaces have proven to be the most capable of evolving and thriving within the new work environment.
It will be interesting to see what 2022 will bring, with the occupancy levels of flexible workspaces at 80 per cent, and recent market reports suggesting that the value of the global coworking industry will surpass $13 billion by 2025. Indeed, the serviced office sector is set to emerge strongly from the pandemic, if the opportunity is taken to adapt to the hybrid working era and the evolving priorities of professionals.
Adapting to the hybrid working era is essential for growth
Many workers are keen to continue with the flexibility of hybrid working. According to the results of a recent OSiT survey, 72 per cent of workers would want to work from the office for one to four days a week. Serviced office providers are therefore well positioned to recover from Covid-19, as they have the means of supporting these changes in workforce preferences.
With the pandemic continuing to bring uncertainty, serviced office providers also have the advantage of being better-equipped to enforce higher standards of health and safety measures for workers. Social-distancing, for instance, can be carried out with greater ease. This is particularly relevant when considering that 95 per cent of people said that they want to return to office, but most of their concerns are around issues of cleanliness in the workplace.
As long as office providers consider what professionals are expecting from businesses, they are in a great position to adapt to changing expectations surrounding the work environment in 2022.
Prioritising a healthy working culture
The pandemic has made many workers be more considered about the office experience they are willing to go back to. But the need for an office in some form has never been clearer. Many people
found that working from home increased the risk of burnout, making it much harder to maintain a healthy work / life balance. For example, 37 per cent of people said that they felt like they were unable to unplug at the end of the day.
On top of this, according to OSiT’s recent survey, 51 per cent of respondents said that their mental health was negatively affected by working from home during lockdowns. And 37 per cent also said that they had experienced increased anxiety and depression.
A focus on fostering a healthy working culture, by prioritising the overall wellbeing of workers, is integral to the success of individuals, as well as businesses. Serviced office providers now have the opportunity to take the prevalent issues amongst workers seriously, which will make them more popular and allow for further growth in 2022.
New models for flexible offices will secure the future
Evolving to meet workers’ needs will mean embracing new models of serviced office, such as the SEMOB (Serviced-Enhanced Multi-Occupancy Buildings) model. This has been a big part of OSiT’s strategy and essentially aims to provide a service alongside a space. The possibilities are endless. Serviced office spaces could include everything from gyms and shops, to GP services and hair salons.
With such easy access to a variety of services, this model increases convenience for professionals, reducing the need for intense, crowd-heavy commuting (which is of particular relevance in light of the pandemic). This approach also encourages the development of multiple streams of revenue, allowing for different types of clients in one building, and improving the resilience of the offering.
The SEMOB model reflects growing demand for more holistic workspace. For example, our OSiT centres in Monument include bedrooms – which are perfect for convenient stayovers on business trips or after the end-of-year office party (Covid permitting, of course). This system has the potential to help ensure that serviced office providers meet the business needs of many, in 2022 and beyond.
Solutions to undervaluation
Flexible and serviced workspace is forecast to make up 30 per cent of the total commercial real estate market by 2030. And in terms of its valuation, it is predicted to reach between £62 and £126 billion by 2025. However, one barrier to market maturity is undervaluation (which, according to recent research, has been as much as by 20 per cent). The rapid evolution of the industry has left little time to develop an accurate way to value the market – until now.
In 2022, it is important that the industry determines how to value offices which are more than just conventional workspace. OSiT’s “Fuchs Formula”, for example, shows what a solution might look like, seeking to establish a more accurate valuation method by accounting for multiple streams of revenue.
A challenging but promising road ahead
Of course, the pandemic has created difficulties for all businesses, but now is a great opportunity for flexible workspace and serviced office providers to use their distinctive offerings to their advantage.
Providers need to adapt to the new working culture, which considers hybrid working the new norm, as well as catering for the wellbeing of the individual worker. Moreover, office space providers can do more to create greater convenience for workers, and themselves, through models like the SEMOB model. This will ensure that they amass greater market share, as well as providing an active solution to the industry’s key issues of the day.