Huge opportunities for Business Investors as the Hybrid Workspace shift accelerates
SALM TEAM 
Although the idea of “flexible work” has become omnipresent following the pandemic, the actual model has existed for quite a while. Half of the workforce was working remotely at least one day a week before the pandemic. Still, the trend’s growing popularity is undeniable — 90% of workers today demand flexible models.
“Before the pandemic, we were living in an era where more and more people — workers and organisations — were moving towards flexibility,” says Joanne Bushell, IWG MD of South Africa. “Back in 2019, over 50% of the world’s workforce was working from somewhere other than a traditional office at least one to two days a week.”
So, how much did COVID-19 accelerate this flexible work trend? According to IWG’s lead generation, quite a bit. The pandemic accelerated requests by 30%, offering 1.3 million requests annually. “When the pandemic first hit, building owners’ questions were: How do we ensure clean air systems? How do we make sure everyone is safe? That is still a critical requirement, but the conversation has shifted towards flexibility,” Bushell said.
“Today, this mass adoption of flexibility has resulted in 88% of organisations instituting flexible working policies and 90% of workers demanding flexible models”, Bushell adds. And that trend shows no signs of slowing down anytime soon.
“Many people thought we were going to return to how we worked pre-pandemic,” said Bushell. “But that isn’t true. People don’t want to waste time and money aimlessly commuting to an office, regardless of what they must accomplish. People value their time, both at work and outside of work. No one wants to go back.”
Moving forward, organisations’ decisions will be based on three critical factors, Bushell says: How they attract and retain employees, how they can focus on the environment and how they can become more dynamic.
“Flexible working is better for people, profits and the planet,” stated Bushell. “People can work how they want to work; organisations can raise profit by rationalising their commercial real estate portfolio, and the planet benefits because cutting down on commutes is a compelling way to reduce CO2 emissions and achieve sustainable goals.”
But the pandemic didn’t just accelerate the hybrid trend for employees and employers. With employers embracing flexible models, the need for more traditional capital leases is nonexistent, and vacancy rates are increasing nationwide. Bushell says this complete shift is something to pay attention to as a real estate investor or landlord.
By partnering with IWG, the building owner can invest in their existing space to convert it to an IWG space (SPACES, Regus and HQ in South Africa) IWG’s best-in-class technology, networks and marketing allow it to promote the space for three to five months before the expected opening date, yielding an immediate return on investment for the partner.
“Suddenly, there is a real dramatic shift in how companies look at where they deploy their workforce and what working looks like every day, and in turn, savvy investors are finding ways to meet that demand and drive long-term returns,” said Bushell. “Building owners can take a percentage of their portfolio, partner with IWG, invest capital in converting that space to a flexible workspace and start earning income from day one.”
Nowadays, entrepreneurs, SMEs, and larger corporates are no longer fixated on leasing ample office space on a long-term multi-year contract to house all their employees. On the contrary, we see big firms downsize to smaller offices, adding and utilising on-demand flex spaces to accommodate most of their workforce’s daily workspace requirements.
The workspace ecosystem has significantly changed since the COVID-19 pandemic, which has profoundly impacted how corporates work and the spaces they work in. This shift has directly affected businesses, where we saw many mergers and acquisitions as many looked to expand their reach and range of products. Still, we also saw an influx of new players in the workspace sector, such as online marketplaces, aggregators, brokers, operators, and financiers.
This may be a sound strategy to, one, accommodate a more global workforce as has been the case post-pandemic with firms hiring globally and working virtually; two, satisfy employee preference for a hybrid model, where employees can work from home, an office and/or flex space, and, three, significantly cut costs and risks associated with large, long-term rental contracts at a volatile time when office occupancy is approximately 40%-60 %.
Since the COVID-19 crisis, the workspace players have consolidated, as the pandemic has created winners and losers within this industry. Many companies are looking to acquire smaller players to gain a foothold in new markets or to expand their presence in existing ones. In times of turmoil, the opportunity for the big to acquire the small presents itself.
It’s important to remember that there is no one size fits all solution. A company should evaluate the needs of its clients and employees and create a tailored approach that works for their business. That being said, flexible working conditions are getting increasingly popular, and as millennials continue to enter the job market, demands for this approach are expected to increase significantly.
The next few years will be significant to forming new and amended corporate workspace policies. An exciting space to keep an eye on.
About IWG Plc.
IWG is the global leader in hybrid work solutions and workspace brands. We create personal, financial, and strategic value for businesses of every size. From some of the most exciting companies and well-known organizations on the planet, to individuals and the next generation of industry leaders. All of them harness the power of IWG’s hybrid working platform to increase their productivity, efficiency, agility, and market proximity.
IWG’s unrivalled network coverage includes approximately, 3,500 locations across more than 120 countries and 83% of Fortune 500 companies are amongst our growing customer base.
Through our brands including Regus, Spaces, HQ and Signature, we help millions of people and their businesses to work more productively. We do so by providing the world’s leading hybrid work platform with professional, inspiring and collaborative workspaces and digital services all available via the IWG app. For more information
Visit www.iwgplc.com and for more information on partnering with IWG, see: https://www.iwgplc.com/develop-a-location
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