Many are indicating a desire to downsize operations as an effort to cut expenditure in the short term. Considering the inclusion of shared space offerings as part of the overall solution might provide corporate clients with the balance of space and tools their staff members need to work, while increasing flexibility and reducing the heavy fixed overheads of traditional offices.
Broll Property Intel’s latest research report Shared Workspace Snapshot looks at ways shared office providers in the Kenyan capital of Nairobi are helping to ensure key economic contributors can continue operating – with managed offices and other shared workspace models.
The report shows an increased need for plug-and-work models has been driving growth of shared workspaces in Kenya over the past 10 years. This is due to the appeal of flexible occupational terms compared with the often rigid nature of standard commercial lease terms.
Operators in Nairobi tend to offer serviced offices, co-working spaces only, or a hybrid model, with the majority of operators opting for the latter, says Jess Cleland, group managing director of Broll East Africa and Indian Ocean. “Over the last decade, there has been a demand for co-working offices from local and international users. This has resulted in most operators focusing their business strategy to cater for the higher end of quality in terms of offering and location.
“With the ongoing travel restrictions, we have seen the immediate demand for shared workspaces has shifted from international to local users, especially smaller spaces.”
In the short term, the flexibility of shared workspace licenses may lead to an initial reduction in occupation, as this is the first option to exit for some companies due to the statutory requirement of fixed minimum lease terms in Kenya. In the longer term, it is anticipated that the interest in shared workspaces might rise, as tenants occupying shell and core spaces might downsize in favour of more flexible options.
“With the sudden forced adoption of agile working, many companies are rethinking requirements – both in terms of the size needed but also what activities their space should promote. In the long term, we expect there may be an increase in the overall take-up of shared office space, driven by a refocus from ‘cost of occupation’ to ‘cost of production’,” Cleland says.
“The world as we know it has been pushed onto a different trajectory and the same is true about the commercial property market. Shared workspaces offer a different approach to doing business, and although we don’t expect it to replace traditional leases entirely, we foresee many companies opting for a hybrid approach that delivers the best of both worlds.