The global flexible office market has been growing at an average of 13% per year over the last decade with technology, economic trends and behavioural changes as the main drivers of this growth*. London is the biggest market with over 1,000 serviced and co-working centres.
To examine this phenomenon, I caught up with Charlie Green, co-CEO of London-based The Office Group (TOG) to find out how his company has been harnessing this trend.
How and when did it all begin?
The Office Group (TOG) started just over 14 years ago in late 2003. I had worked with Olly Olsen (my co-founder and still my business partner) back then and we had a crystal clear shared vision to create a different proposition in the serviced office market, to challenge what was a very pedestrian, boring and vanilla offer (yet for which there was still significant demand).
What was your big idea and what was your inspiration?
We set out to create an office that would be so good, people and businesses would want to stay for the long term, despite the flexibility we would still provide.
What did the future look like then and has it materialised?
Inspiration came from all corners, but hardly anything from the traditional real estate market, far more from boutique hotels, bars, restaurants and private member’s clubs. We had a good understanding that there lacked any kind of hospitality experience in the office world and very little relationship between the provider and the occupier of space.
How has your business grown?
TOG grew steadily with initial funding from a private equity house who were bought out after seven years by Lloyd Dorfman, the founder of Travelex. Lloyd committed significant funds for growth and in July 2017, we were fortunate to be able to secure The Blackstone Group as our new majority investor/partner.
This allows us to take TOG forward in a truly meaningful way and respond in earnest to the fundamental shift in how all businesses are working.
How has technology impacted your business and how are you harnessing it?
Technology is driving changes in the work we are doing and consequently we’re seeing radical behavioural changes in the work place. This is affecting all business, from freelancers, to start-ups to established corporates.
Flexibility is a fundamental to all and speed with which technology allows us to work is requiring that flexibility as we increasingly struggle to forecast our space needs. And then add to that political uncertainty, domestic and abroad and we truly see the rigidity of the traditional lease as anachronistic.
Then examine how technology is creating a far better educated, more discerning user (through social media and more generally from access to data and information) and the experience within the work place is now a critical reason for a company to choose a place to work. Experience being everything from design, to service to the range of facilities on offer.
How do you think workspace requirements are going to change in the next ten years?
Serviced offices were always the domain of the short-term user, for temporary space or one-off projects. We’re now staring at an altogether different offering that creates a business home, that is a long term option but with flexibility to give individuals and businesses choice.
What will be the biggest influence on TOG's plans for the future?
The flexible shared work space sector is, of course, challenging the out-of-date serviced office model. But far more importantly, the impact is much wider than this, affecting the entire office market and challenging the conventional lease. The biggest influence on our growth is the speed with which companies, whatever their size, continue to understand that flexible space becomes a strategic part of how and where they work. If we can match the demand with the supply, then we are moving in the right direction.
*Source: CBRE "Flexible Revolution" report, November 2017