As the world adjusts to life post-COVID, hybrid working continues to cement its position as the new normal for the majority of organisations around the world. For building owners and investors, partnering with IWG is the smart way to capitalise on the growing demand for flexible workspace.
As the world adjusts to the new realities of the post-pandemic era, hybrid working is continuing to gain popularity. Fast becoming the new normal for the majority of businesses worldwide, it’s dominating the news as organisations look to keep pace with changing expectations among employees. For property investors, building owners and landlords, there’s a huge opportunity to provide the space to facilitate this move to hybrid.
The big-name adopters leading the way
Google, Microsoft and Cisco are among the prominent companies adopting hybrid work, making bold moves to support this new way of working. These moves include downsizing their headquarters: Microsoft has halted plans to develop a hub in Atlanta and Google is pushing for “real estate efficiency” amid “slow return to office patterns” across its five largest locations. Meanwhile, Cisco says its shift to hybrid working has saved the company $500m over the last five years.
Fewer overheads, more flexibility
As businesses adapt to hybrid work models, many are downsizing their large, city-centre premises. This allows them to reduce overheads amid an uncertain economic landscape, while still meeting the evolving needs of their workforce. Maintaining large commercial units can be costly, and experts predict that a record 1.1bn square feet of US office space will sit empty by 2030.
Flexible leases and short-term contracts are in high demand as they allow businesses to stay agile, competitive and attract top talent while enabling employees to work closer to home. IWG's 2022 CFO Survey found that 74% of CFOs plan to reduce office space, opting for flexible offices that allow businesses to scale their office space as needed, without the long-term commitments and high overhead costs associated with traditional real estate.
Outside cities – where the real opportunity lies
The growing adoption of flex space solutions by businesses presents a significant opportunity for property owners and landlords to cater to this new way of working. Location is critical, with areas outside cities in high demand as employees want high-quality places to work closer to their homes. According to IWG research, demand for IWG workspaces outside of city centres grew by 36% in 2022, as more people choose to work from the heart of their local communities.
This trend shows no sign of slowing in 2023, creating a once-in-a-generation opportunity for property owners. As companies increasingly seek affordable office spaces in a range of locations, including the suburbs, property owners can attract tenants by offering flexible workspaces tailored to the needs of their hybrid workforce.
By partnering with IWG, property owners can not only capitalise on the growing demand for flexible office space but also future-proof their portfolios as flexible workspaces increasingly become a key amenity for the future of work. Gaining access to IWG's expertise, resources, and global network of clients, property owners can boost their rental income, reduce vacancy rates, and enhance the overall value of their properties.
IWG continues to sign record-breaking numbers of partnership agreements with building owners around the world to turn empty building space into profitable income-generating flexible workspaces. Find out how to partner with IWG here.