Companies that don’t invest in their real estate risk a staff exodus and a drop in productivity.
That’s the view of property consultant Knight Frank, which has just published its (Y)OUR SPACE report on the future of the global workplace and surveyed senior executives from 120 global companies with a combined workforce of 3.5 million.
Dr Lee Elliott, Global Head of Occupier Research at Knight Frank, will be presenting the key findings of the research at a special event at HOME, in Manchester, on January 30 in association with BusinessCloud.
A total of 86 per cent of respondents said their real estate was now seen as a strategic device for their business and was crucial in the recruitment and retention of staff.
Elliott, who has presented the report to 1,300 people across the world since its launch, predicted that demand for flexible and co-working space would increase.
He told BusinessCloud: “Most companies have a two-year business cycle but, in London for example, the average office lease is seven years. Effectively Landlords are asking companies to ‘take a punt’ when signing up to a conventional lease.
“What companies like WeWork have recognised is that by providing space on flexible terms you’re more in line with the customer’s needs. Businesses want flexible or shorter lease terms and they’re willing to pay a bit extra for it.”
Elliott said that ‘space-as-a service’ flexibility will give control back to occupiers. One third of respondents to the Your Space report said that between 5-50 per cent of their office space was flexible or serviced but this was expected to increase to two thirds within three years.
The report also found that global companies broadly welcomed new technology like AI and automation and believed it would upskill employees and make them more productive.
Elliott said today’s culture was such occupiers were expecting amenities like gyms, sleep pods and even a “sanctuary space” to support the mental wellbeing of their staff.
“It’s no longer viable just to provide a desk in an office,” he said, adding that he felt the growth in global merger and acquisition activity would fuel future demand for office space.
The leader of Manchester City Council, Sir Richard Leese, will also be speaking at Knight Frank’s ‘Insights from the global workplace’ event on January 30.
Other confirmed speakers include David Porter, partner, office head, Knight Frank; Jon Matthews, director, Jon Matthews Architects; Toby Sproll, director of retail, amenity and community at Bruntwood; and Aine McTiernan, north lead of PwC Scale.