COVID-19: Recommendations for Flexible Workspace

by | 23 March 2020

In this challenging time as COVID-19 impacts workplace operations globally, we break down how occupiers can engage with flexible workspace operators, as both a near-term business continuity solution and longer-term way of working for enterprises. We also set out steps for flexible workspace operators on how to maintain operations and protect the health and wellbeing of members at this time.

To access all of our insights and recommendations on the impact of COVID-19 across global real estate markets please visit:

Near-Term: Business Continuity for Occupiers

The risk of exposure to COVID-19 exists across all workplace environments. Unless a flexible workspace operator has implemented heightened health and safety protocols, the exposure risk in a flexible workspace is just as high, if not higher, than a traditional office.

However, many flexible workspaces are taking drastic measures to maintain strong hygiene and social distancing (more on this below), and so there may be specific ways to leverage the sector as part of your business continuity efforts. Depending on your business you may need to utilize a selection of these, rather than just one:

  • Whole Office Contingency: in the event your office is closed, or take-up of new space is not possible due to construction delays, taking up space in less impacted locations through a flexible workspace operator could be considered. Several operators are proactively marketing this solution and some are exploring ways to unlock large blocks of inventory to accommodate major continuity demand.
  • Mission Critical Risk Mitigation: consider proactively leveraging the flexible workspace sector to disperse mission critical teams across two or more locations in order to mitigate risk.
  • Suburban Location Touch Downs: if the commute for some employees is particularly challenging or if working from home is not viable or productive, then using a flexible workspace operator with a network of residential/suburban locations could be another option.
  • Facilitating Meetings: occupiers could utilize meeting and advanced AV equipment at flexible workspace locations to facilitate necessary meetings, to disperse team numbers to aid distancing and risk mitigation. For example, large meetings could be broken up into smaller meetings and held at various locations with streaming/VC equipment readily available.

We encourage occupiers to both build up tools and capabilities to enable their employees to work from home and explore workplace contingency plans with flexible workspace operators. Our regional experts can help you create and execute a multi-layered approach, reach out to Jonathan Wright (Asia), Tom Sleigh (EMEA), Francesco De Camilli (Americas), and Jonathan Kearins (ANZ) for more advice.

Long-term Implications: What We’re Tracking in a New Occupier Future

While it is too early to forecast the lasting effects of COVID-19 on flexible workspace, this pandemic is certain to impact both occupiers’ and operators’ future response plans and corporate real estate approach. Here are some of the key outcomes we will be tracking:

  • The massive work-from-home shift, mandated or encouraged by governments globally, presents the first real opportunity to measure productivity from remote working on a meaningful scale. How will this impact occupier’s willingness to implement remote working of staff connected by cloud technology in the future and what role will the flexible workspace sector play here, given not everyone has the ideal environment at home?
  • Will a reduction in in-person building tours become persistent and drive adoption of new technologies to facilitate remote buildings tours? Is this a catalyst for the digitization in real estate, with a more widespread adoption of proptech and A.I. (e.g. robots cleaning, AR/VR touring)?
  • Prolonged economic stagnation may present the first real financial stress test for many new operator entrants into the sector. How will this impact the dynamics of the sector six months from now?
  • Will flexible workspace, split operations or city campus models emerge as key components of the corporate real estate strategies and business continuity plans for occupiers during disaster response scenarios?
  • What types of new welfare, safety and security protocol will become commonplace for operators post-COVID-19?

COVID-19 Operator Recommendations: Response and Readiness

Our experts in each region have consulted with leading operators responding to the current situation to summarise recommendations for response and readiness in flexible workspace. Junny Lee, CEO of The Work Project, one of the largest premium operators in Singapore, a region affected early on by COVID-19, shared the following practical steps for operators to take:

  • Clarify and define a) government rules b) building rules c) your workspace ‘house rules’. There may be differences across the three. For example, entry restrictions may be stricter in your locations than government advisories on immigration.
  • Define Standard Operating Procedures and designate an owner to communicate SOPs with members.
  • Develop lists of essential supplies and perform weekly audits.
  • Designate an owner to communicate and coordinate policy with landlords and local government.
  • Prepare a communication strategy for the worst-case scenarios (i.e. onsite detection of cases).
  • Prepare and communicate back-up options for members that may involve alternate locations.

Paul Salnikow, CEO of The Executive Centre, who has led the business for 25 years and has ensured operational resilience through SARS and the GFC offered the following advice to the sector:

“We, as operators, act as a support system to our members and our focus, first and foremost, is to be safely open and operational in order to allow for business at our locations to continue. At TEC, we have 135+ locations in 32 cities across APAC and we have learnt to adapt our response across each market to ensure that we take the best care possible of both our members and our teams, depending on the local situation. Operators should follow the directives of global health bodies like WHO, maintain the highest of safety standards such as regular deep cleaning and sanitation of all locations, provide masks to all centre staff, as well as regularly check members’ and guests’ temperature before entry, and document whether they have recently visited any high-risk cities. The number one goal of TEC, and any operator, particularly at this challenging time, should be to ensure  we do everything possible to help our members to continue to run their businesses in a healthy and safe environment.”

Additional risk-mitigation measures and recommendations for operators around the world:

  • Sanitisation: Hourly cleaning of common areas. Especially high-risk areas like door handles, elevator buttons, kitchen areas, hot-desks and meeting areas.
  • Protocol: Advanced communication to all visitors that they should not enter if they have symptoms or have recently visited high-risk cities.
  • Shifts: Using split shift working patterns for operational teams.
  • Catering: Cancellation of any buffet style catering that is offered in locations.
  • Events: Cancellation of all events and gatherings above 20 people.
  • Screening: Regular temperature checks for operational, members, and guests prior to entrance.
  • Protection: Provisioning of surgical masks to operational teams. Introduction of mandatory wearing of masks by members and guests

Operational Management Tips for Operators

In addition to the practical protocols outlined above, we recommend taking the following steps to manage your business through this challenging time:

  • Learn from operators in APAC: Follow the actions of operators based in APAC who have now been dealing with COVID-19 for two months, particularly market leading operators with broad networks across China, Hong Kong and Singapore. Reach out to Colliers if you would like to be connected with operators in APAC, we will be happy to facilitate discussions.
  • Do cash flow contingency planning: Take the time to review the distribution of short and long-term contracts that make up the P&L of each of your locations. Model the various outcomes of low-medium-high risk scenarios. What if revenue drops by 20%? 50%? What if this endures for 3 months? 6 months? What is the tipping point for each impacted location?
  • Manage your landlord/partner: If you don’t have strong reserves, approach your landlord now and manage their expectations. Communicate your situation and seek rent relief, if possible. As landlords in some APAC markets have offered rent relief to retailers at this time, there is precedent.
  • Expect delays: Anticipate 60-90 day delays on both the demand and supply side of your business. Construction timelines could be extended. Existing clients in your pipeline may push pause as employees opt to work from home in the near-term.
  • Leverage New Demand: Anticipate the closure of corporate offices (due to hyperlocal outbreaks) and expect occupiers searching for back-up flexible workspace solutions for their employees. Proactively market your workspace as a solution. Consider approaching your landlord partners, they may wish to leverage your portfolio to offer as a solution to their tenants.
  • Explore New Revenue Streams: Consider upgrading the technology of your meeting & conference rooms and marketing these locations as remote conferencing zones. Do you have virtual memberships? Mail services? What else could you be selling? If you’re unsure, ask your members, they’ll tell you what they want.

With Thanks to our Contributors:
Junny Lee – CEO, The Work Project
Paul Salnikow – CEO, The Executive Centre
John Arenas – CEO, Serendipity Labs
Amol Sarva – CEO, Knotel
Clive Dale – Founder, Bioom
David Wong – Co-Founder, Booqed
Dr. Richard Claydon – CEO, roundPegz
Edward Farrelly – Senior Vice President, Marsh
Amanda Chuback – Client Engagement Manager, MovePlan
Allan Price – Director of Development, 4U Systems
Rhys Morgan – Regional Manager, Airswift
Camille Merritt – VP, Eden
Liz Elam – Founder, GCUC
Ben Wright – CEO, Upsuite

About the Authors:

Jonathan Wright leads Colliers’ Flexible Workplace Consulting throughout the Asia Pacific market; he founded this business line in 2016 to support our occupier, operator and asset owner clients in leveraging the growing and dynamic sector.

 

 

Francesco De Camilli leads Colliers’ Flexible Workplace Consulting for Occupier Services in the Americas by providing multi-market advisory on flex solutions in one of the fastest growing industry sectors in commercial real estate. As an expert, he helps drive enterprising solutions for Colliers clients, as well as builds relationships with operators on a national platform level.

 

Tom Sleigh joined Colliers in 2019 as Head of Flexible Workplace Consultancy in the EMEA region. He supports occupier clients in the execution of their flexible workspace strategy and requirements, in addition to advising flexible operators on their expansion strategy throughout EMEA.

 

 

Jonathan Kearins leads Colliers’ Flexible Workspace Consulting in ANZ. Jonathan covers the Australian markets, delivering creative solutions to our occupier and operator clients.