Real Estate Investor Magazine South Africa April/ May 2020 | Page 44

OFFICE
Digitalisation & the flexible
revolution in real estate
T
he past 24 years has seen exponential growth in flexible
workspaces in South Africa since Regus pioneered the
local flexible work spaces market with the first centre
in 1996. The last five years have seen the lion’s share of the
growth as technology and digitalisation allow more of the
global workforce to work remotely.
According to SA Head of Partnership Growth, for global
workspace provider, IWG plc and REImag master investor,
Alan van der Westhuizen there are now over an estimated
250 flexible work spaces centres operating in this space in SA.
American commercial real estate services and investment
firm, CBRE believes that the flexible office market is growing
at 24% per annum. The changing face of the way real estate
is utilised in South Africa and globally, is being accelerated
by the needs of modern businesses, employees and
landlords to keep up with the new way of working.
Businesses
Managing cleaning services, IT, telephone and office utilities
are no longer necessary for small or large businesses.
Workspace as service options are proving a cost-effective
alternative as businesses opt to outsource functions and
utilities that used to sit inside the traditional business
model. The global quest for flexibility and the need to
acquire services and products at break-neck speed, drives
the development of technology like the Regus App which
allows members to book space to work or meet almost
anywhere in the world.
Businesses are benefitting from more flexible real estate
models, lower costs and access to a wider talent pool as the
barriers of location-specific work slowly dissolve.
Employees
Employees are also leading the pack with 69% of millennials
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APRIL/MAY 2020 SA Real Estate Investor Magazine
willing to trade other work package benefits for better
workspace while 53% of global professionals now work
remotely for at least half their working week.
Worldwide, employees are choosing jobs and locations
that include a reduced commute, more flexible working
patterns and a better work/life balance.
Global Workplace Analytics also recorded a 103% increase
in location independent work since 2006. Tech-savvy remote
workers in developing nations are taking up freelance work
in areas like engine optimisation, digital design, software
development and computer programming.
The breakdown in South African population age shows
that 30 percent of the population is made up of millennials.
The last of the millennials have moved into the employment
field as Generation X’ers are starting to exit employment
into retirement and although they are not the exclusive
reason that the demand for shared office space is growing,
they do contribute a significant portion.
It is expected that the working market will now be
dominated by millennials seeking more lucrative economic
work opportunities. They have a close affinity to technology,
which increases their flexibility and provides the ability to work
outside the traditional office component. These perceived
benefits are fast becoming a deal-breaker in the war for talent.
Landlords
For landlords, including flexible workspace in their tenant
mix is proving to be a point of significant difference
when marketing. It has been proved that a shared office
space offering improves building values, secures longer
tenancy, a more resilient business model, and attractive
amenities for tenants. In fact, JLL estimates that 30% of
corporate real estate will be flexible space by 2030.
The CBRE also showed that 71 percent of occupiers
believe flexible workspaces are vital to delivering corporate
real estate objectives.
“Millennials have a close
affinity to technology, which
increases their flexibility
and provides the ability to
work outside the traditional
office component. These
perceived benefits are fast
becoming a deal-breaker in
the war for talent.”
Locally, mixed-use spaces like the Mall of Africa have
enjoyed the gains of supplementing conventional retail and
office space with flexible work spaces like that of Spaces
Waterfall, also from the IWG stable. This location offers
space for training, on-demand meetings, drop-in lounges,
together with a café for more informal work or meetings.
“We can make any space work. We have small buildings
where we occupy the whole building, medium buildings
where we operate the main ground floor reception and the first
few floors and larger buildings where we occupy a number of
floors or manage the whole building,” says van der Westuizen.
Through a novel franchise model, at IWG, they are now
growing their network in South Africa and worldwide. The
first of its kind, the model offers multi-franchise operators,
landlords and high net worth individuals the opportunity to
enter the flexible work spaces market with the support of
a reputable partner who founded the coworking industry.
“We have seen great success in the UK and in Africa so
far. These are exciting times for real estate. The workspace
revolution is here, and it is growing significantly. We believe
this provides an opportunity to enter the market before it
enters its most aggressive growth phase,” concludes Alan.
About IWG, International Workplace Group
IWG believes that business success is underpinned by the
effectiveness and happiness of its people. So, they made it
their mission to help millions of people have a great day at
work – every day.
IWG has drawn upon its 30-year heritage in flexible
workspace to create a world leading commercial real estate
platform. Its portfolio of operating brands, including Regus,
Spaces, Signature by Regus, HQ, offers an unrivalled level
of choice for businesses of all sizes and budgets. With over
one million workspaces and a presence in hundreds of
countries, cities, towns, and transport hubs worldwide, IWG
has the world’s largest network of flexible workspaces and
a full suite of business support services to enable people to
focus on their core business and enjoy a great day at work.
For more information please visit:
https://franchise.iwgplc.com/
https://www.linkedin.com/company/iwg-plc
SOURCE IWG
SA Real Estate Investor Magazine APRIL/MAY 2020
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