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Industry insights

The changing face of workplace real estate.

Five insights shaping the future of workplace real estate from leading voices in the industry.

Read time 8 minutes.

Long have we noticed shifts in the office real estate market, it's been well documented even by ourselves, the rise of co-working, the home office and the changing face of large companies. But we wanted to know more about why and what's in-store — gathering together some of the leading office space owners, architects and co-working providers for a panel discussion on property development and workplace real-estate. Charlie Green, Co-founder and CEO of The Office Group (TOG), Dara Huang Founder of Design Haus Liberty, Rajdeep Gahir Co-founder and CEO of Vivahouse and eporta's very own Aneeqa Khan, Founder and CEO.

We've distilled the conversation into five key insights affecting how you or your clients will be selecting, designing and selling workplace solutions in today's global market.

The panelists of 'The Future of Real Estate Property Panel' discussion hosted by eporta in our London office.
The panelists of 'The Future of Real Estate Property Panel' discussion hosted by eporta in our London office.
The power has shifted from the landlords, who've always had control. They've benefited from profound wealth all from being detached from any relationship with the actual occupier of the space. -Charlie Green, Co-Founder and CEO of The Office Group (TOG)

Power Shifts

The traditional state of play is a landlord buys or builds a building, finished to the level of a habitable shell, a third party is hired to sell or lease the building to a company in need of workspace. The lease is often between 5-15 years, with yearly rent raises expected. The occupier and the owner are more than an arm's length away with the power firmly in the landlords' court. However, as we see, the system is broken and needs fixing. Contenders in the industry such as The Office Group, WeWork, Spaces Regus and more offer an alternative prospect and approach.

Charlie summarised what it takes to make it as a property provider in the current market. "A successful landlord today is one that is prepared to make the level of engagement with the occupier and say, we see what you need, we understand it, we are prepared to work hard to deliver it."

But why are the roles reversing? Well, Rajdeep Gahir, Founder of Vivahouse, a leading co-living provider in London with in-house co-working spaces, had some ideas. "We live in a world where the traditional consumer is generally more demanding in every way, so that's coincided and catalysed the changes. We are seeing real estate trying to catch up with the elements already provided in other industries; flexibility, convenience and everything on demand."

TOG workspace located in Aldgate, London.
TOG workspace located in Aldgate, London.

Charlie agreed and indicated that other forces have been at play too. "The speed of technology and, the immediacy and convenience of the responses we get compared to real estate, which has never responded or engaged directly with occupiers before the last few years, has caused friction in the anachronistic industry."

There was a consensus across the panel that the consumer has changed and the end consumer drives the changes in the market, which is why this is a bottom-up devolution of power.

What does this mean for designers? The brief you are getting may be broader in scope, with an onus on the needs of the end client. What's more, the expectations are high as the importance of design as a brand differentiator grows more prominent.

Luxury has primarily meant flexibility for co-working providers, SMEs haven't wanted to lock into long term leases and spend their capital getting lawyers involved. So fundamentally, the need for flexibility from a workplace perspective has changed the basic demands of the occupier. - Rajdeep Gahir, Founder and CEO of Vivahouse.

Flexibility that suits

Another critical reason why the power is shifting from landlord to occupier is the changing face of the businesses themselves.

As Charlie pointed out, "People need flexibility, and nobody can forecast what space they may need moving forward, so you have to give them that flexibility. Since setting up the business, we've always said that people should only ever leave us if they outgrow us or go bust."

Co-working at it's best in a London TOG office.
Co-working at it's best in a London TOG office.

A response to this need for flexibility by businesses has been to encourage employees to work remotely. The boom of hot-desking may have reached its peak, but the requirement for flexible leases and scalable spaces has not, which is why the market share of co-working solutions is growing. What's more, this sparks essential criteria for developers to assess when selecting locations for developments and how they will break the buildings up.

"We increasingly see a need to be able to work anywhere." Charlie continued, "The empirical evidence is that people don't necessarily want to come into town at rush hour and go home at rush hour every single day, we crave a better quality of life. However, we don't want to work at home. Because, well... Netflix. So what we're looking at now is should we be opening up satellite offices outside of town."

Pastel hues at the TOG workspace located in Aldgate, London.
TOG workspace located in Marylebone, London.
Pastel hues at the TOG workspace located in Aldgate, London.
TOG workspace located in Marylebone, London.

What does this mean for designers? Get your travel cards at the ready, as it looks like you'll be spending some time in the burbs', as communal satellite locations spring up as a local pitstop for workers. But there is also the need to make expensive city spaces work smarter for the occupier and the owner, flexible working solutions, alternative uses for the space attracting both amazing employees while adding potential revenue streams for the operators. This led our panel to discuss the benefits of mixed-use buildings, not only for employees but for over overpopulated cities.

Dara founder of architecture studio- Design Haus Liberty, works globally on co-working and office developments, but particularly in London and Hong Kong, giving her a unique perspective on how things could be done. "In London, you're considered a mixed-use space if you have retail on the bottom and residential on the top. In Asia, it's super common to have 50 floors, and every level has a different use. So you'll have retail on the 34th floor, spa and gym on the 4th, offices on floors 10 through to 20, eateries and apartments in the rest."

TOG workspace located in Marylebone, London.
TOG workspace located in Marylebone, London.

Charlie is hesitant, as the research that TOG has undertaken highlights that currently Londoner's, in particular, are unlikely to live and work in the same building. However, he conceded that "we do have a couple of apartments within one of our buildings, single units with bedrooms. Interestingly people use them on an ad-hoc basis. So I think that the mixed-use piece will become a concept to watch. We're almost like a micro mix-use service provider already with cafes and gyms, so the residential offering is a logical progression."

Dara emphasised that "vertical cities which mix living and work, giving a blended lifestyle, are going to become the norm."

What does this mean for design? Workspaces are increasingly taking on the brief of a hotel in nature, often on a similar scale too. The spaces can need to provide all the amenities of a luxury hospitality project, from bedrooms to restaurants, gyms and spas, all in addition to a stimulating working environment.

Design is no longer a luxury. It's an absolute necessity. - Dara Huang Founder of Design Haus Liberty

Democratic Design

One clear thing is the importance of design within workplace real estate. Whether looking for an occupier to sign a long term lease or to attract an individual choosing a desk for the month in a co-working space, occupancy directly correlates with a perceived notion of great design.

"Great design has been democratised with small companies, who traditionally wouldn't invest in that themselves gaining access to spaces that can attract and retain the best talent today." Voiced Rajdeep, of her experience both at Vivahouse and with her former employer, WeWork.

On starting TOG, Charlie and his fellow co-founder Olly went to Silicon Valley to check out the likes of Facebook, Dropbox and Google's offices, what they deduced from that visit has shaped their approach to developing workspaces. "What we took from that was that designs with options shouldn't be a luxury; this should be a standard approach to delivering what clients need. We were left asking what can we put into our buildings that give smaller businesses and growing businesses the same kind of experience, obviously, not on the scale of Facebook or Palo Alto, but that was our challenge."

TOG office design in London.
TOG office internal.png
TOG office design in London.

Aneeqa offered some reasoning for this emphasis on the design from an employers perspective. "You're team scroll through Instagram, and see a bunch of pictures, and expect their office to look like that. They are entitled to feel that way too, as you're competing for their talent, and the other places they could work at look like those photos. So to entice them in and keep them happy design plays a significant role."

The link between fulfilment and the design of a workspace are becoming widely documented, but the concept expands beyond the parameters of a desk, as noted by Rajdeep. "The changes we've seen over the last decade, firstly, with the emergence of office space, and now with co-living is a new way of providing democratised access for someone living in the city to experience the best of the city."

What does this mean for design? The ROI of excellent workplace design is becoming a known entity; Google even researched the topic at Milan this year. It's not just co-working spaces and large companies that are benefiting from the changes, design extends to any office redesign that you may be part of. Unfortunately, it may not mean that budgets are bigger, so finding innovative ways to not only keep up with your competitors but to out-do them is critical.

Open air terrace at TOG office space in London.
Open air terrace at TOG office space in London.
We have to be asking ourselves questions like, is this the ultimate product for our consumer? Would they like this design? Can it be continuously enjoyed? -Rajdeep Gahir, Founder of Vivahouse.

Someone else's shoes

Being a designer, you are used to interrogating a brief, and it can often also be about pushing the developer, operator or yourself to see beyond the basics. To truly consider the variety of end users that will be inhabiting the workplace, asking how you can please them and encourage them to stay put?

Dara's thoughts on the matter, "You need great design to sell a building; the asset has become about the brand. The brand is about the design. The design is about a lifestyle. The lifestyle is about the tenant, and so it comes down to user demand. You're never going to attract somebody with just a building."

tog co-working dining.png
tog coworking welcome.png

But there are other advantages to a user based approach to designing workspaces, Rajdeep touched on one such thing. "Well, I think focusing on the consumer, is the first key to longevity because concentrating on the consumer means you're always in tune with their changing needs. Of course, in real estate, it's hard, because you can't just change the building every couple of years. But going from a consumer-centric approach and thinking, okay, how are people going to be using this space in 10 years helps stave off the changes of a decade."

What does this mean for design? Dara's point is intriguing as some spaces are built with a single brand in mind, but mixed-use offices and co-working spaces have to take a broader brush stroke approach, to suit the many, not the few. But, when you boil great workplace design down, your client is the individual whose bottom is on the desk chair, they aren't the one setting the brief or paying the bill but make them happy, and you'll have one actual satisfied client. And as Rajdeep alluded to, spending time focussing on the end user, conducting qualitative and quantitative research on their needs and the context of the building, while pushing back on elements of the brief that jar with these, are becoming the tick boxes for a successful scheme.

Workspace designed by Design Haus Liberty for The Collective.
Workspace designed by Design Haus Liberty for The Collective.
What you're seeing across the board are developers having to kind of kit up their spaces to a turnkey level. And that's something that they never had to do even two years ago. -Dara Huang, Founder of Design Haus Liberty.

Delivered with a bow

At the start of this article, we discussed the traditional approach to workplace real estate projects, bare minimum at best. The keys were handed over to a blank canvas often one with ceiling tiles, electrics and grey carpet. Desks, chairs and meeting tables were not part of the deal. Today clients expect to walk into an office, open their laptop and let business commence. The internet should be fired up, the kitchen stocked, and the reception area strategically littered with magazines, that create an Instagrammable moment as soon as clients walk through the doors.

Bar design by Design Haus Liberty for MyHotel Group.
Bar design by Design Haus Liberty for MyHotel Group.

Dara, whose experience crosses over every design sector from workplace design to hospitality and residential developments, has noticed this expectation growing, stemming from the immediacy city dwellers are used to in their rental apartments and hotel stays. This has also highlighted the need for services that match the level of design.

"The level of service beyond the design- to the ambience, the operations, the partners you collaborate with, it's about selling the dream from the community upwards. I know the whole blurred boundaries of work-life balance has become a cliche, but we're moving into the next generation of that."

Property panel audience at the eporta office in London.
Property panel audience at the eporta office in London.

In Conclusion

There is so much to consider, and in the ever-changing real estate landscape it can seem hard to keep up, but I think Charlie summed up the overarching goal of workplace design for today, tomorrow and years to come. "The real luxury for everybody now is time. So developing solutions that enable a greater work-life balance, or personal time at home is both an opportunity and an obligation."

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