JLL discuses flex 2.0
Preparing #CRE for a world where people don’t use the office (everyday)
Ben Munn, Managing Director and Global Lead of JLL’s flex space solutions joins Bold Founder, Caleb Parker, to discuss the big 30-30 number:
JLL predicted 30% of all office space will be flexible by 2030.
The two explore the Work From Anywhere (#WFA) movement, what JLL’s customers are saying, and what this means for office landlords.
Ben says we’re moving towards a world where “the office” is no longer just the 4 walls that are leased by a company. He believes landlords need to prepare for a world where people aren’t coming into the office every day.
Looking ahead there will be a focus on human centric thinking from real estate suppliers. In the near future office assets without Space-as-a-Service will be considered bottom of the market and struggle for demand, therefore producing lower valuations.
Caleb and Ben go on to discuss the value drivers in repurposing office buildings by delivering the 5 pillars of Space-as-a-Service to compete for market share in a new flexible and service-driven commercial real estate industry.
Value Bombs
The future is flexible
- Companies are moving to more agile ways to provide space for their employees
- The real estate industry is moving to Flex 2.0
- There will be a focus on human centric thinking from the supply side of the market
- Historically the idea of the individual being a customer hasn’t been a thought in commercial real estate
- Giving employees workplace choice along with flexible working is picking up
- We’re moving towards a world where “the office” is no longer just the 4 walls that are leased by a company, but also includes anywhere someone works, including the home, places near home, or elsewhere
- Workplace choice isn’t new, but historically has been limited to options within the 4 walls of the company’s leased space. Now we’re seeing options beyond the 4 walls.
- Duty of care of home working is becoming a priority for corporates
- Stage of life impacts decisions on whether someone chooses to work from home
- We may see comp packages including workplace choices options where people have a choice to 1) pimp out their home office, 2) work near home or 3) commute into a central office
Landlords need to prepare for a world where people aren’t coming into the office every day
- Target customers can be more diverse than the leaseholder
- Assets have an opportunity to provide a number of different products than can attract different customers in different ways
- To be competitive in the future will require proactive customer engagement
- We won’t see a race to the bottom, there’s going to be a flight to quality
- Landlords who repurpose their assets to deliver that 5 pillars of Space-as-a-Service and provide a range of service layers, flexibility and diverse products are going to be the winners post pandemic
- Value will be driven by the sum of multiple income layers across the asset
- We’re heading towards a future where real estate costs will be optimised based on demand
- We’ll see real estate being bought in more flexible time increments, and supply will be able to turn costs up and down as a result
- We’re going to see Landlords partner with multiple workplace brands in multiple markets to target different customers
- In the near future, office assets without Space-as-a-Service will be considered bottom of the market and struggle for demand, therefore have lower valuations