Flexible workspace is moving beyond conventional coworking stereotypes as businesses seek greater choice between traditional long-term leases and more flexible office solutions. According to Barney Wilson, a Senior Executive at Colliers, the sector has undergone a fundamental shift since the pandemic. Before Covid, a large portion of the conversation involved educating tenants on the benefits of flexible options. After the pandemic, demand for flexibility skyrocketed.
The Rise of Managed Offices
Wilson, who previously worked in the London flexible workspace market before relocating to Sydney in April, notes that London has been at the forefront of this evolution. He describes the UK capital as a mature, diverse market that has changed drastically over the last decade. In contrast, Wilson says Australia is still playing catch-up, though the potential is enormous.
One significant development in the sector is the rise of managed offices. These spaces provide a middle ground between a traditional lease and a serviced office. Wilson describes them as a solution offering a self-contained space on flexible terms with all-inclusive pricing. He expects this model to become increasingly important in Australia as landlords and operators respond to occupiers seeking flexibility without sacrificing privacy or quality.
The market is seeing demand for larger spaces. Wilson reports that businesses are looking for environments for 20 to 100+ people with their own meeting rooms, executive offices, kitchens, and break-out areas. Tenants often want to sign for 12 to 24 months. Despite this, the market does not always have products that perfectly meet this combination of requirements.
Wilson observes that many businesses are forced into traditional leases simply because a suitable flexible option is unavailable. A 30-person business might want a dedicated office with facilities, yet find only small offices within a larger coworking environment. This gap is particularly evident for those seeking a genuinely self-contained workplace rather than a small hub within a larger shared space.
While this gap presents a challenge, it also creates an opportunity for traditional landlords. The changing requirements present a chance for them to rethink how existing office space is utilised. Wilson argues that this shift will force landlords to adapt and use empty space more effectively. He suggests that flexible office space should be viewed as part of the broader office market rather than a separate alternative to traditional leasing.
This evolution is influencing how operators design their spaces. The focus is now on matching the product to specific occupier requirements rather than offering a generic solution. Wilson notes that the strongest outcomes occur when operators understand both sides of the market.
Wilson said that more than 50 per cent of enquiries go out and view space within a week and the average time from first enquiry to someone signing is 10 working days. This rapid turnaround is a stark contrast to the months-long traditional leasing process.
The quality of the physical workplace remains a critical factor. Wilson emphasises that community is important but cannot compensate for a poor-quality space. If an office is dark, small, or uncomfortable, the community element loses its value. This discernment among occupiers is driving a higher standard of design and build.
The Future of Dedicated Spaces
At the moment, flexible workspace providers are limited to one or a few floors within a whole building. Mr Wilson says soon there will be locations where every floor will be purely flexible offices of all sizes from 10 square metres to 1,000.
