UAE’s flexible workspaces in demand
THESE DAYS IT COULD MEAN LOCATIONS AT SOME OF THE BEST ADDRESSES IN TOWN AND MUCH MORE
Want an office space but only for a few hours each day? Or want to juggle your work hours away from the 9-5 straitjacket? Think flexible … and that seems to be exactly what is trending in Dubai and Abu Dhabi’s office space market.
For a new generation of start-ups and freelancer-operated businesses, flexible workspaces are providing more than just a desk and a broadband connection. These days, they go the full distance — locations in some of the most sought after commercial addresses in the city, to answering services that are much more than a pre-recorded message.
All without needing to break the bank for it. “Where a typical company would spend more than Dh20,000 for just a basic set-up, we are investing and refining our products to offer the same for 90-95 per cent less,” said David Godchaux, regional CEO at Servcorp, which lists two levels at the Emirates Towers in Dubai and one level at the World Trade Centre in Abu Dhabi as its leasable space.
“What attracts co-working users is often how pretty the space is. But there are a lot of pretty coworking spaces out there and not all of them glitter.
“A lot of operators of coworking spaces also offer 24/7 access to their facilities. But the ultimate differentiation between different products that look very similar on the surface is when it comes to ‘everything else’ other than the coworking desk,” Godchaux said.
Expanding space
Prospective tenants can choose from a lot of flexible space options these days. Real estate consultancy JLL reckons the current supply of such stock in Dubai is around 700,000 square feet from 55 projects. That might seem like a lot, but ■ Recent research by the workspace operator Regus found 85 per cent of working parents feel “strongly about flexible working that they would forfeit other benefits to make it available”. And 96 per cent of working parents said that they want to work for an employer that provides flexible working as part of a benefits package, while 85 per cent said they are willing to work through their lunch-break for flexible working.
According to JLL, space in the 20 largest “flexible office” markets in the world grew by 30 per cent in 2017, or equivalent to around 1 million square metres. Flexible office space will account for 30 per cent of some corporate portfolios by 2030, it adds. makes up less than 1 per cent of the total office stock in Dubai.
JLL forecasts this could grow to about 5 per cent by 2022. (In comparison, there are 110 plus such locations in Tokyo and more than 210 in London.) International names such as Servcorp, myOffice, and Regus are already present, and there’s been much talk that WeWork — with a patented office layout style that won’t be out of place among Silicon Valley corporate campuses — could soon make an entry here.
And there were quite a few local developers/landlords who got into the flexible working space over the last three years in the belief that there would be ready demand from all the new start-ups being created. Some of that initial optimism seems to have subsided.
“We believe landlords in the region should be considering flexible space as a viable option to counter the effects of increased vacancies as well as providing an amenity corporates and small enterprises increasingly require,” Toby Hall, director — Head of Offices and Business Space Leasing — UAE at JLL, had said recently. “As regulations are being relaxed in UAE to allow international companies to fully own a business outside free zones, there is a big opportunity for international workspace operators to enter and grow in the Middle East.”
More than just a workspace
Servcorp certainly has been adding to its local portfolio, which now includes space at the Al Habtoor Business Tower in Dubai Marina and Level 36 at Tower 3 in the Etihad Tower cluster in Abu Dhabi. Godchaux, however, warns that flexible workspaces should not be seen as the sum total of a workspace and a latest-generation office phone.
“Sustainable co-working is ■ much more than just the real estate aspect — many small operators are excessively focusing on a modern look and feel with minimum services and a secondary address,” said Godchaux. “I believe this is not the right product for most companies who still value quality and refined fitouts in prestigious buildings, fast internet and technology.” And of course, an actual human voice answering a call.
“Sadly, a lot of operators are new in the market and believe there is fast money to be generated, and unfortunately often fail to deliver on promises and retain clients,” he added.
Upcoming government incentives to spur new business activity will also have a say in driving demand for flexible workspaces. Abu Dhabi’s announcement that new ventures need not have commercial licences for the first two years is seen by operators as a major boost.
In Dubai, “Major free zone operators are already including flexible office space, such as Dtech in Dubai Silicon Oasis, Fintech Hub in DIFC and In5 across Tecom projects,” said Craig Plumb, head of Research at JLL Mena. “With regulations easing, more of the future supply being developed is likely to be offered as flexible office space.
“Investors and developers are increasingly adapting to the rise of flexible space by introducing their own concepts or partnering with existing providers,” Plumb added.