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Demand for flexibility drives changing workplace sector THE RISE of flexible or shared offices, as exemplified by US provider WeWork, was the sub-
ject of a roundtable discussion hosted by international law firm Trowers & Hamlins on the UK
Trowers & Hamlins’ Amanda Hanmore: “it’s something that will change more”
Government stand at MIPIM this week. Simon Cornford, co-founder of workplace occupancy specialists Smart Deskers, kicked off the session, arguing that the office market has fundamentally changed. “We’re seeing a market where work/life balance has changed,” he said. “No longer are you expected to be at your desk from eight to eight or whatever it might be. Companies are trying to retain talent by giving people the ability to work anytime, anywhere.” What’s more, Cornford continued, the location of flexible offices is changing. “We’re starting to see shared working environments in the suburbs,” he said. “It allows you to reduce your desk count in central London. You’re giving people the ability to be in a more professional environment than their home and it allows employers to retain talent.” Amanda Hanmore, partner and
Covivio steps into serviced offices FRENCH real estate investor Covivio has made a move into the burgeoning serviced office sector with five transactions in France and more planned in Europe, and is eyeing the nascent co-living residential market. Covivio, which holds assets throughout northern Europe across a range of sectors, has invested into the ‘pro-working’ sector where it is interested in taking on buildings offering a hybrid service between traditional office space, serviced offices and co-working hotdesk facilities. To date the investor, which manages a total fund of €23bn, has acquired four assets in Paris and one in the southern city of Marseille, which it operates un-
der the Wellio brand. The portfolio is set for further growth in key French cities and further European markets. The office properties represent
a new direction for Covivio, which is invested in long-term assets within the traditional office market in France and Germany, residential properties in
Covivio’s Philippe Boyer: “at the moment we are focusing on big cities”
MIPIM News 4 • 29 • 15 March 2019
head of real estate in the Midlands at Trowers & Hamlins, agreed that the market was changing, but added that some of her clients were sticking to more traditional workplace strategies. “I think it is changing and I think it’s something that will change more,” she said. “More women are at a senior level and that has helped lead the change. However, I also act for companies that haven’t looked at investing in flexible space.” The growing number of flexible offices also presents some difficulties for investors and landlords, Adrian Leavey, partner and head of commercial real estate at Trowers & Hamlins pointed out. “For many years we’ve been doing the same thing, especially when it comes to offices: an institutional lease, long term with a great covenant and an upwards only rent review,” he said. “These are principles that simply don’t work with flexible uses. Suddenly changing a building from having five tenants to 500 members is difficult to cope with. It’s management intensive and there is a cost of redesign. There is also an issue about valuation.”
Germany, and hotels and other hospitality sector properties throughout the continent. Covivio innovation director Philippe Boyer said that the firm was interested in “mixed usage buildings” with space for regular, permanent office tenants, with “zones for pro-working”. He said: “At the moment we are focusing on big cities like Paris. We have big competition from big groups like WeWork. More and more spaces have opened up in this sector in the last few years.” Covivio has also recently invested in a tranche of UK hotel assets, in Manchester, London and Edinburgh, operated by Intercontinental. Around 40% of the company’s assets are located in France, followed by Germany which accounts for roughly a third of its holdings.