Brexit and the Flexible Workspace Market.

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Now that the initial shock of the Brexit referendum decision is over, it is perhaps appropriate to consider how this will affect the property market and specifically the flexible space market.

Mainstream property has been suffering and shares in some major property companies and funds have been suspended – but what will happen in the flexible market? By this, I am talking about serviced offices, managed workspace, light industrial units and coworking centres. ie, anything multi- occupied and let on flexible licences.

Possible outcomes of Brexit are that businesses shed workforce or even close and move abroad. Alternatively, they may delay investment decisions or not commit themselves to taking new leases.

On the plus side, our market occupies a strong position. There is plenty of evidence that over the past two years the amount of space occupiers have been taking in flexible environments has grown substantially. Research by Instant Offices shows that the flexible space sector grew by 11% last year with little effect on occupancy levels. The growth in coworking space is predicted to continue to grow exponentially.

But will this continue post Brexit?

Although it’s too early to know, the clues lead us back to the start of the last recession in 2007, when flexible space operators saw an increase in enquiries for smaller spaces as firms decided to shed staff. Many people decided to go into self-employment, start their own businesses rather than seek paid employment. Approximately a year later, the public sector, under pressure with their budgets, also started to shed their workforce and these helped create demand for small spaces as individuals decided to set up their own businesses.

Over the past few years the UK has seen unprecedented growth in start-up enterprises fuelling the demand for small flexible spaces and coworking. With the advent of modern technology it is now possible to work remotely anywhere. One possibility therefore is that the UK will adjust to the Brexit shock and eventually create more small businesses simply because many individuals will have no real choice or alternative.

The logical choice for these firms is to either take space with genuinely flexible easy-in, easy-out terms or adopt more flexible working arrangements, which allows their workforce to work locally.

In this scenario, the flexible workspace industry will be one of the main beneficiaries.

Brexit has caused uncertainty and one of the possible outcomes of any uncertain market is that longer term decisions are postponed. Again, the flexible workspace market can benefit when companies decide to reduce their risk by taking space on flexible agreements. The benefits of this are well known in the sector and provided the benefits are widely publicised, the sector can continue to grow.

About the business centre specialist

Tom Stokes is the UK's leading specialist in the development and management of Business Centres, Managed Workspace and Serviced Offices. A Fellow of the Royal Institution of Chartered Surveyors (FRICS), with nearly 40 years experience in property and the majority of that experience in the flexible space market, he comes with a wealth of experience. Quite simply, there is nothing in this sector which he has not experienced. In 2000, he set up Evans Easyspace, retiring from the company at Easter 2011. He built up the company from scratch to having 58 business centres throughout the UK and was the leading provider of new, quality small offices, workshops and self storage units which were let on genuine easy in, easy out terms. The Evans Easyspace brand is highly respected and the company is also one of the most efficient in the sector. He is a firm believer that small businesses want flexibility and that is what he can advise on and deliver in a way which will help your business grow. He is also a past Chair of the Business Centre Association (bca), having joined the Board in 2003. He is a life member of the bca and still advises the bca on certain issues.
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