Collaborative and flexible offices are being developed with hotel-like services and amenities focusing on tenants’ workplace satisfaction. The focus is on adding a premium to these offices and reaping benefits. And shared workplaces are leading the transformation.

Two offices located adjacent to each other may have different rents. It is possible as one building could be future-ready and the other may lack the necessary design creativity that meets the occupier’s expectations of a truly collaborative workspace.

Interesting office trends have emerged in recent times: While designers and architects are designing green pods for those who prefer working from home, ergonomically curated, biophilic office designs are increasing. However, the two trends are acting against each other – while the former promotes a hybrid work culture, the latter indicates a re-entry to offices, giving way to a more collaborative workforce. As the opposing ideas continue to thrive, there are common threads — workspaces are being designed to incorporate keeping in mind the well-being of the occupiers, and offices are getting equipped with a wide range of amenities. The impact is visible on the rent these offices demand.

The hotelisation of offices indicates the workplace transformation into a commercial space like a hotel. It treats tenants as valued guests and provides building occupants with the same quality of service as they would find in the hospitality sector.

And the hotelisation of the workspace is here to stay.

So what is changing?

The coronavirus has been a game-changer for offices. More than two years into the pandemic, working from home or remotely seems like an increasingly permanent proposition. With people wanting to increasingly work in a hybrid mode, workplace evolution has picked pace. Features like “plug and play” are offered to all. Access to a cafeteria or a cloud kitchen, tenants’ lounges, coffee bar, parking, concierge, shuttle buses, discount deals from local restaurants and shops, conference centre management, internal community events, fitness centre and wellness classes are all features of the hotelised workplace.

Ergonomically designed workplaces with biophilic features are said to enhance the connectivity of building occupants with the natural environment through direct and indirect nature and space and place conditions. The design includes an open office design, hot-desking, and coworking spaces. Hence, the evolved workplace design is an open and collaborative environment that makes people feel welcome and energized to work.

The factors behind

The way businesses approach real estate decisions is being reshaped by technological advancements, a more mobile workforce, and uncertain economic growth. Amidst the uncertainty, landlords have realized that to improve tenant retention, command better rental values and create future-ready offices, they need to take a more service-oriented role. And occupiers continue to demand more flexible lease terms, better quality in-house services and enhanced offerings for well-rounded end-user experiences.

The impact

The trend is already impacting the design of commercial real estate (CRE). First, it has pushed landlords and occupiers towards better asset management practices. As a result, landlords now focus on getting the right set of services and designing a more open and collaborative workspace.

Second, the trend has fundamentally spurred demand for quality offices. Both old and new portfolios are being developed to meet the high demand. Hence, various redevelopment projects have resurfaced, adding to Grade A supply of offices. And shared workplaces are leading this change.

The upside of hotelisation

Hotels have a unique selling proposition that businesses want to replicate, like having a 24/7 service, a consistent and standardized experience, and a host of facilities. There is more focus on creating a warm and welcoming environment by incorporating different elements like the use of natural light, nature sounds, furnishing with upholstery, and other materials that are not typical in an office environment.

Hotelisation is now a way to future-proof the existing buildings. It is helping building owners to command higher rents and remain relevant for tenants in a pandemic-like situation – a trend visible with leading shared office operators. The transformative strategy of hotelisation worked for most of these operators, who wanted to differentiate their offerings through customized service offerings.

However, office owners should exercise caution. As one replicates the services of a hotel, he must strike a balance between catering to tenants’ higher expectations and the incremental costs associated with designing, building and managing high-quality amenities. Focusing on people-oriented services might add to the overall experience. That should hold bring success in the long run.

(By Sumit Lakhani, Deputy CEO, Awfis)

This story appeared in the 28 November, 2022 issue of Financial Express and was originally published at: Future-proofing the workspace through hotelisation

To ensure the seamless execution of hybrid work model amid office expansion in multiple locations, organizations are increasingly partnering with flex space operators.

The onset of the pandemic led to the migration of the Indian workforce back to their hometowns, and as flexibility became the core of workplace strategies during the pandemic, the workforce still demands similar flexibility in the post-pandemic world. Consequently, organizations of all sizes are adopting a hybrid work model to offer the benefits of both, working from home and working from the office, to their employees, according to the ‘Indian Flex Occupier’s Survey 2022’, done jointly by Awfis, India’s leading network of co-working spaces, and Qdesq, a tech-enabled workplace provider.

To ensure the seamless execution of hybrid work model amid office expansion in multiple locations, organizations are increasingly partnering with flex space operators, and 35-40% of companies are embracing the idea of hybrid working, making an ideal scenario for the flex market to flourish.

As per the survey, with things setting back to normal and offices reopening, the majority of the workforce prefer to work 5 days/ week from the office, an environment they feel will be healthy for higher productivity, better team collaboration, and in-person interactions, benefits that were traded for the comfort of working from home.

The second best-preferred model of working is hybrid, where occupiers prefer to enjoy the benefits of working from the office as well as home, thus helping them attain the work-life balance, a demand which peaked post-pandemic.

However, an interesting point to be noted is that the eagerness to work from the office remains robust among the occupiers, whether they choose to work 5 days a week or 2 days a week from the office.

Commenting on the same, Amit Ramani, Founder & CEO, Awfis, said, “The long-term future of the entire business will be determined by the current occupier patterns, which are also creating new expansion opportunities for flex space operators in the short term. This is an opportune time for flex space operators to reinvent their workspaces, diversify their presence in cities, and carefully analyse tenant expectations to accommodate them effectively as flexibility continues to hold sway over workplace strategies of enterprises of all sizes.”

“The pandemic-induced shift in occupier demands completely transformed the coworking sector in India. In times of uncertainty, the coworking industry saw a new set of workplace requirements that later evolved into a new style of working after the global affliction. At Awfis, we recognised these changes as a revolutionary growth opportunity and immediately redesigned our products through innovation, paving the path for success, growth, and expansion,” said Sumit Lakhani, Deputy CEO, Awfis.

Paras Arora, Founder & CEO, Qdesq, said, “The post-pandemic era is a witness to the deployment of new workspace models to maintain profitability, instil work flexibility and employees’ well-being. No longer confined to small startups, the flexible workspace segment, today, is embracing the arrival of various big enterprises. As firms continue to evolve with the changing market dynamics, the workforce expectations, too, have changed with new working models like hybrid, work-from-home, and working from office coming to the fore. Amid such new and emerging trends, the need for key stakeholders to understand the mindset of modern-day businesses and their workforce to make informed decisions has become imperative. Our latest survey report, aimed at offering a better perspective, gives valuable insights into the changing preferences of flexible occupiers. It highlights the key impetus for enterprises to finalize the workspace, amenities priorities, and perspective on tech enhancements, among others.”

The survey shows how occupier needs have drastically evolved and will turn out to be favorable for the coworking industry’s growth. The majority of respondents are ready to partner with coworking players to seamlessly implement a distributed workforce strategy, while 30% of respondents are looking for cost-effective alternatives to rental offices for financial flexibility and the remaining respondents want to choose managed offices to free themselves from workspace administration responsibilities, which can otherwise be professionally managed by office space providers.

This story appeared in the 23 November, 2022 issue of Financial Express and was originally published at: Flex workspace market to flourish as 35-40% of companies prefer hybrid working

Occupiers are looking at adoption of flex spaces as the most preferred choice, where offering flexibility to employees and promoting work-life balance will be the protagonists.

As the third wave of Covid-19 started waning in February this year, the return to office gained momentum after a gap of two years. As a result, by June 2022, about 34% of the companies saw about 75-100% of the employees back in office (including hybrid work), according to a C-Suite Survey conducted by Colliers and Awfis.

With a drop in the number of Covid-19 infections and an increase in the rate of vaccination, employers gradually started reopening the workspaces for their employees. However, a shift in the working patterns was seen as employers started offering hybrid working options to their employees.

Further, occupiers are looking at increased agility for their real estate portfolios. Distributed workspace patterns and hybrid work environment are the new reality that occupiers are embracing. Occupiers are looking at adoption of flex spaces as the most preferred choice, where offering flexibility to employees and promoting work-life balance will be the protagonists.

As per the survey, about 74% of the occupiers are looking towards distributed workspaces as a strategy to shift from location-centric to people-centric workspaces. This will enable flexibility to employees while furthering productivity gains for businesses.

While 54% of the occupiers who highly prefer distributed workspace are from the IT/ITES, followed by Consulting and New Tech (Analytics) companies, 44% of the occupiers who do not prefer to execute distributed workspaces are majorly from IT/ITES, followed by E-commerce and consulting companies.

Close to 53% occupiers prefer working from home + office as their preferred portfolio strategy.

The survey was conducted during May-June 2022 for occupiers across different sectors such as IT/ITeS, BFSI, engineering and manufacturing and others. A total of about 150 responses were received from C-Suite executives spanning Founders, CEOs, COOs and CHROs of various companies. The company size of the respondents varied, starting from the range 1500 employees to companies having over 10,000 employees.

“To understand how occupiers are reimagining their future workplaces, Colliers and flex space operator Awfis conducted a survey with CXOs to understand their strategies regarding distributed workplaces and role of flex spaces. Occupiers are looking for a workplace model that not only furthers their business goals, but also creates a comfortable working environment for the employees. Employee wellness has now become an integral part of real estate decision-making for occupiers. Occupiers are paying heed to aspects such as work-life balance and the mental well-being of employees. As occupiers weave in employees’ wellbeing along with furthering business goals, we see an overarching theme of distributed workplaces in their plans,” said Ramesh Nair, Chief Executive Officer | India and Managing Director, Market Development | Asia, Colliers.

“A distributed workplace can be in several forms – mix of flex spaces and traditional office in the same city; multi-offices in the same city `ala a hub and spoke model; a mix of flex space and traditional offices across tier I and tier II cities – No one size fits all. The approach towards distributed workplaces is now propelling the growth of flex spaces in metro cities, with flex operators also making inroads into tier II cities. Flex operators have already leased 3.5 million sq feet of office space during H1 2022 in the top six cities, about 73% of the space leased in full year in 2021. In tier II cities, flex spaces are likely to grow more than two-fold to 5.5 million sq feet by the end of 2022,” Nair added.

“As businesses reinstitute their operations and the world races back to normalcy, organizations are seeking innovative workplace strategies that do not hinder employee productivity levels achieved during remote working. While few organizations still hold onto the work-from-home model intending to uphold operational overheads, others have prioritized flexibility as the crucial determinant in devising their post-pandemic workspace strategy. Amid this accelerated business recovery, there is a growing perplexity among organizations to select the ideal workplace model to conduct operations in full swing and distributed workforce strategy stands out as the most sustainable option,” said Amit Ramani, Founder & CEO, Awfis.

Going ahead, over the course of the next two years, occupiers approaching their lease expiry are likely to explore relocation options. As a result, occupiers are likely to include distributed workspaces as a part of their portfolio strategy. This is likely to include one head office near the CBD/SBD, with multiple smaller offices near larger residential locations. Opting for distributed workspaces can allow occupiers to operate in a hybrid work-from-home model and keep their capital expenditure low.

This story appeared in the 4 August, 2022 issue of Financial Express and was originally published at: 53% occupiers prefer working from home + office: Survey