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Flexible workplaces – the COVID-19 effect

By Dominic Fagan


Published 16 December 2019


In December last year we published an article entitled “Flexible workplaces – The PropTech effect” which discussed how technology is driving changes in the way we work and the impact this is having on the real estate market. At the time of writing that article we were, of course, blissfully unaware that the world was on the cusp of an unprecedented event which would significantly accelerate the pace of change. In this article we will revisit some of the points raised in our previous article in light of the Covid-19 pandemic to assess how the flexible workspace sector is likely to be impacted both in the short-term and in the long-term. We will also revisit the concept of “space as a service” and the role technology will play in attracting and retaining occupiers in the post-Covid-19 office market.

Short-term pain, long-term gain

Our previous article discussed how co-working specialists such as WeWork, Regus and Hub-Hub provided a solution to occupier demand for flexibility by allowing members to increase or decrease their requirements for office space at the click of a button. The model has been, unsurprisingly, popular with occupiers keen to avoid the long-term fixed costs associated with real estate. Co-working operators rushed to meet demand by acquiring large amounts of new leasehold space in prime locations, often fitted out with the highest spec technology. However, the business model is now under serious pressure, with operators tied in to lengthy and expensive leases while most of their customers have the flexibility to terminate on short notice.

Whether or not co-working operators can weather the storm will depend on a number of factors such as their liquidity, the duration of the lockdown, as well as the support they receive from the government and their landlords. For those that can survive, the rewards could be great. The experiences of the last month or so will have been an eye-opener for many people who previously had doubts about the feasibility of agile working. Those of us lucky enough to be able to work remotely have shown ourselves to be adaptable and have embraced technologies, such as video-conferencing, which will have been new to many. As vast amounts of office space lies unused, it seems inevitable that more businesses will reassess their real estate holdings. The accelerated move towards agile working will manifest itself in various ways, one of which will no-doubt be more home-working, but this won’t be the whole story. There will still be a need for face-to-face meetings, team building, community and collaboration in the post-Covid world. Flexible workspace operators who can bear the near-term pain will be well placed to capitalise on the newly-agile workforce when the economy rebounds.

Space as a service

The second part of our previous article argued that the overall package of services provided by a landlord will become as important as the physical location. This will be true in the post-Covid real estate market more than ever. The Coronavirus crisis will, unfortunately, lead to a large number of company insolvencies, which could in turn result in higher vacancy rates and a surplus of office stock. The effect will likely be a tenant-led market, with occupiers having wider choice and greater bargaining power. We previously identified some practical examples of how landlords are utilising technology to provide tailored services which differentiate their buildings. Proactive landlords who want to gain a competitive edge will already be thinking about what additional services can be provided to enhance occupier experience when the lockdown ends. Some ideas which may appeal to a post-epidemic workforce include:

  • Automated cleaning, such as robotic vacuums which use laser technology and computer vision to clean commercial spaces. This reduces the need for human cleaners to cover the entirety of an office floor and frees up their time for more skilled cleaning tasks such as sanitising touch surfaces;
  • Building-specific smartphone apps which use radio communication to give automatic access to buildings, without the need to tap a key-card. Apps can also enable visitors to be checked in digitally, reducing face-to-face contact with reception staff, and allow a means for social interaction without meeting in person;
  • Greater use of contactless technology, for example, automatic doors to allow for hands-free access, voice controls in elevators and phasing out of cash payments on site in favour of contactless payments.


The flexible workspace business model is undoubtedly facing a serious threat. Even for those operators who have sufficient liquidity to survive a lockdown, heightened anxiety about sharing space makes it likely that there will be changes in the look and feel of co-working centres in the future. In particular, it might be necessary for operators to reduce the density of their centres by limiting membership numbers, which will adversely affect profitability. However, the impact of the virus on attitudes to agile working could, in the medium to long term, create a further surge in demand for properly-managed flexible office space.

All providers of office space, whether traditional or flexible, will need to consider new ways to attract and retain occupiers in order to minimise voids. Technology will have a big part to play in ensuring that the workplaces of the future are safe and landlords who are early adopters of these technologies will have a product which has a competitive edge. New technologies are constantly being developed which will improve the real estate sector’s response to the crisis. If there is a silver lining to the Covid-19 cloud for the office sector it is that these new innovations will continue to benefit both users and providers of office space well in to the future.