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Flexible workspace a key growth market in South Africa

Flexible workspace a key growth market in South Africa

IWG plc. ahead of the game

According to a recent economic study, between 8% and 13% of all employment will be associated with flexible workspaces in most developed economies by 2030. A worldwide ‘workplace revolution’ is under way, and yet in developing economies like South Africa, IWG plc. (International Workplace Group) has been leading the way for over 20 years. Their adaption to this new reality has seen big corporates use co-working spaces for remote teams to work where, when and how they choose.

According to Tom Mundy JLL, Head: Advisory for Sub-Saharan Africa, “Our forecasts in the next 10 years sees the flexible workspace as likely to play out as a key growth market.  The highly cyclical nature of emerging market economies mean that it is expensive and risky for companies to take out long leases. Indeed take-up (net leasing activity) tends to be highly volatile, to the extent that landlords need higher than usual levels of vacant space to account for market growth when economies are expanding.”

“Conversely, when markets contract, they tend to have high levels of vacant space, which can remain empty for some time. Flexible space allows for that fluctuation in demand, significantly mitigating risk for landlords,” he adds.

Millennial workers and the growing start-up scene are the big drivers behind a very strong growth for flexible working solutions in recent years. It is also a consequence of the fast-growing cities in South Africa which are suffering heavy traffic congestion; still with significant lack of public transportation.

The feedback of an IWG global survey from 2018 speaks volumes: The benefits businesses are experiencing are clear: a resounding 93% said that flexible workspaces enable employees to be more productive while on the move and one of the most significant outcomes of the Environmental studies conducted by Regus was that an increase in flexible working will reduce levels of carbon dioxide by 214 million tonnes per year by 2030.

“In many cases, the daily use of a traditional office is not required. Employees may need to simply drop in for key meetings, have access to remote locations and a network of business environments around the world when and where they require. Technology and work culture are changing quickly to support these new flexible demands,” says Jo Anne Bushell, Managing Director South Africa and VP Sales for Africa, IWG plc.

“Other than bringing optimised expense sheets to companies and to start-ups, in particular, flexible working spaces also deliver the ideal work environment that employees demand these days,” says Joanne.

The workplace has gone through many changes over the past few years. There have been advances in technology, distributed teams, and locations, increasing freelance/contractor mixes, rising real estate prices and more millennials arriving in professional roles.

This evolution is not going to stop and it’s clear that the office of the future will be a very different place. Our experience, as well as recent studies into the way workplaces are changing, gives us a good picture of what these offices might look like. In the coming years, we can expect firms consolidating their offices for more efficient use, greater staff density, satellite offices, and agile working increasing. There will also be a growing need for collaborative spaces.

‘Without question it is going to be a major disruptor. There is already quite a lot of vacant space in the market; prime space that is newly completed, as well as B grade that has been vacated.  Flexible space providers will be key to the utilisation of this space. Though disruption implies volatility and uncertainty in the market, in SA it may well be the case that the occupation of this vacant space by flex providers increases demand and makes market rents less volatile”, adds Tom.

IWG operates as Regus and Spaces in South Africa and different co-working concepts are set up to suit different customer segments, based on their preferences. From the more traditional professional business centre model, to the hybrid approach which incorporates high-design and creative workspaces.

Joanne concludes, “The revolution in the way people work signifies a need for businesses to challenge the way they think, employ and spend their money. IWG has been living the reality of flexible working from the start, but we keep adapting and innovating our offering to remain ahead of the pack.”

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