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Discover the key drivers making flexible office space the working trend of the future
Mark Dixon, CEO of IWG, says the last five years in the real estate industry have been “all about change.”
Speaking at a panel discussion at MIPIM in France on 13th March 2019, Dixon reflected on the key drivers that have seen a growing global demand among professionals, businesses and landlords for flexible workspace.
“Typically, real estate moves slowly, but momentum for flexible workspace has really picked up,” Dixon explained.
“There are several key reasons for this: firstly, digitisation, which has completely changed the way people are working, how people consume space, and how companies procure space; secondly, there’s an environmental factor.
“More and more companies are starting to embrace flexible working to cut commuting. Why would we have our teams commuting one hour here, one hour back, when they could work just as easily close to where they live in a secure environment? If you can give a worker two hours of their time back every day, that’s worth more than money.”
The drivers are distinctly global in nature, as is the demand. IWG’s customer-base counts 2.5 million people in over 110 countries, many of whom are companies turning to communal work hubs rather than investing in their own bricks and mortar offices.
As Dixon says, it’s what companies want: “Businesses feel they can hire more people and people will be more productive if they are working in a well-designed space that is nearer to where they live.
“It is also what employees themselves want. New generations coming into the workplace don’t want to spend as much time commuting and they want to have a good workplace with a good community.”
Dixon highlights a final driver shaping the real estate industry, the accounting regulation IFRS 16 enforced on 1st January 2019, requiring companies to measure, present and disclose leases.
He explains: “This new lease accounting standard has changed everything for mid-sized and large-sized companies. I have probably had a dozen conversations in the last two days at MIPIM with large corporates who say IFRS 16 is top of their agenda. They are complaining about it – it’s a lot of work and it’s a lot of new pressure on the real-estate team as they start to work on ways to make their portfolio more flexible. Because if it’s flexible [office space] then it’s not on the balance sheet, but if it’s fixed then it’s on the balance sheet and appears as debt.”
Dixon says that, ultimately, IWG wants people to have a great day at work. Using flexible workspace gives professionals access to “meeting some nice people, having some good coffee, finding that everything works and that they are supported by a team.” He concludes: “You can go home knowing you have achieved something.”
Read our parent company IWG’s latest Global Workspace Survey on how flexible working has become the new normal