There has been a huge shift in the London office market over the last five years. How has it changed and what impact do you think the current global health crisis will have?
Over the past few years it has been fantastic to see flexible office space become such a well-established sector in the Capital. It has welcomed new entrants to the market alongside an increase in the number and diversity of customers. We are seeing the commercial real estate market change at pace, driven by the end user: businesses of all shapes and sizes are asking “what is the right environment for my staff?” The attraction of flexible space has also stimulated demand across a wide range of locations beyond the traditional London business destinations.
Of course, the Covid-19 pandemic has now presented a new set of challenges for the industry and the economy as a whole. While it isn’t yet possible to gauge the longer-term effects, it is clear the widespread disruption will have a serious impact on a lot of small and medium-sized businesses.
On a more positive note, the lockdown has brought the benefits of flexible work environments to the attention of even more businesses and will undoubtedly change future working practices. I believe the last three months have highlighted how important social interaction and identity is to a business. Whilst remote working is viable for most, businesses need space to bring their teams together to collaborate and work effectively.
Is Workspace in a position to weather these unprecedented changes?
I am confident that our scale, operating platform and strong balance sheet will help us weather this storm. We have a loyal and highly diverse customer base and have been working hard throughout the crisis to support them. Our flexible product – both the flexibility of the lease and the freedom we give customers to personalise their space – is still very attractive.
A key part of our offer is the option for customers to expand or contract the size of their space depending on where they are in their growth journey. Once the lockdown is over, and as businesses look to get on their feet again, this element of flexibility will be essential for many who will be reviewing their space requirements. We know that for most of our customers, staff recruitment and retention represent a higher proportion of their overall cost base than rent – and our offer allows them to downsize in difficult times and scale up again as the economy recovers. Equally, we are well positioned to capture new customers looking for an attractive, flexible space and lease offer.
As the new CEO, what are your key areas of focus?
Well, I certainly didn’t expect to be faced with a global pandemic in my first year as CEO! Right now I’m focusing on supporting customers as best we can to help them survive through the lockdown, return to work and over time rebuild their businesses. We are working tirelessly to offer solutions to customers, including rent deferrals and a 50% rent discount during the lockdown.
As we emerge from the market turmoil, I believe we are well placed to continue our fantastic success story over the long term. With this in mind, I am not planning on making radical changes to our business model but we cannot stand still in such a competitive and dynamic market.
A key area of focus is to improve our customer service proposition, enhancing our capabilities in both attracting customers and retaining them for the long term. We have created a new executive role of Chief Customer Officer to drive forward the Workspace brand and product offer.
The creation of a dedicated sales team should improve the quality of service to prospective customers. It also allows our centre managers to focus on raising the level of the day-to-day customer support. We will continue to invest in our property portfolio, upgrading and expanding existing buildings and carefully selecting acquisition opportunities.
The Covid-19 crisis has highlighted the importance of communities and the health of both our planet and individuals. What does Workspace do to support social and environmental sustainability?
Creating sustainable and energy efficient buildings has always been a cornerstone of our strategy, and we have now set ambitious science-based targets to deliver a net-zero carbon real estate portfolio. To make a tangible impact we need to work closely with customers, supply chains and partners to help them become more sustainable. Last year we launched an online energy portal across several business centres, enabling customers to view their energy consumption in real-time. We’ve also introduced popular environmental working groups with our customers where, as a landlord, we can share recycling and energy consumption data and guidance, gather feedback and encourage collaboration.
The Covid-19 outbreak has delivered a stark reminder of how important it is to support communities that are especially vulnerable in times of crisis. This is why we have donated funds to the National Emergency Trust Coronavirus Appeal which offers financial help to those communities most affected. We are also donating to a charity providing protective equipment to NHS staff while they care for Covid-19 patients.
We are also passionate about supporting young people in London, carrying out regular career days, CV workshops and interviews, mentoring programmes and arranging work placements for young people who are struggling and on the fringes of the community. We have had an exciting year supporting a new charity partner, Great Ormond Street Hospital, fundraising almost £50,000 so far through a variety of colourful fundraising events, including a winter marathon walk in which around a third of Workspace’s staff took part.
How will your newly articulated purpose drive your success?
Workspace’s purpose is to give businesses the freedom to grow. This is why flexibility is so central to our offer and why we provide the space and lease terms that allow our customers to continuously adapt, as well as a suite of other services that will help them to grow their businesses.
Our purpose is not new – this reason for being has driven our business since its foundation. It has created a culture that puts people at the heart of the business and places an emphasis on customer service. We believe that articulating our purpose and belief, alongside the values that we have been embedding since last year, provides renewed focus for our teams and will help drive clearer decision making across the business.