Having spent most of my career in the flexible workspace sector, I could not be more enthusiastic about how bright the future is for coworking and flexspace, and furthermore I am delighted to see technology and software leaders such as Yardi investing heavily in technology to fuel the growth and development of the sector.
I have been privileged to see the coworking and flexspace sector grow from a few London-based serviced offices to what it is today, one of the fastest-growing parts of the real estate world. That said, it still only accounts for 4% of all deals in London, according to the latest research from Cushman & Wakefield and Colliers International.
While real estate continues to develop an understanding of the coworking market, the industry is still a little shell-shocked about how it has crept up on them. That part of the real estate sector often misses the point when they debate coworking. I hear “we are not coworking, coworking doesn’t make money – when will the bubble burst?”
Larger operators account for less than 13% of the market in the UK and the flexspace and coworking community is made up of businesses that care about innovation, member experience and the effect of their service on worker wellness. In short, it’s all about the customers and what makes them happy. Their obsession for customer service is what drives the industry. A happy client is a loyal client and, despite being on a flexible license, will stay for a long time.
It is this common purpose that will mean the sector will continue to thrive and grow its share of the real estate market. Just visit a Work.Life, Fora, The Ministry, Uncommon, TOG, Spaces or Huckletree.
Shift in customer need
I co-founded Hubcreate (RJmetis) in 2001 with a determination to create a leader in management software for the shared workspace industry. While the sector’s growth was fueled by technology and creative firms, the focus was on reliable telephony systems rather than operational software. With the advent of mobiles and software-as-a-service applications, the customer need shifted and better, more reliable bandwidth and wifi superseded the need for a phone. According to coworking magazine Deskmag, poor internet is the one of the top three reasons customers will leave a space.
Coworking is now entering a third stage of tech development. WeWork has shifted the focus from technical infrastructure to operational management software, investing heavily in enterprise-grade software and building a platform as a foundation from which they grow, and provide the services and experience that today’s workers expect as well as the data insight from which to develop strategy.
Yardi was quick to recognise the need for an enterprise-level flexspace platform and when I met Neal Gemassmer, vice president for international at Yardi, I was impressed by the firm’s commitment to superior products and customer service – values it shares with the coworking movement – as well as its passion for coworking and its desire to learn so it can create the very best infrastructure for anyone running a coworking or flexspace business.
Technology used in flexible workspace differs from that used in traditional offices in a number of ways and Yardi’s experience and track record of building software solutions in both residential and commercial real estate puts it in a unique place to create solutions for the flexible office sector. Coworking requires specific technological solutions to meet the demands of their customer demographic. In some ways, this is very similar to the demands of the build-to-rent sector where mobile technology and apps service individual needs – something that Yardi also has many years of experience developing.
With its acquisition of Wun Systems and Phoenix Broadband, the business is in a position to offer landlords, REITs and property asset managers entering the flexspace market as well as existing coworking and flexspace operators a complete service delivering all their technology needs from wifi, to broadband as well as a full suite of management software solutions such as Yardi Kube.
Let’s be honest: the property industry has been slow to embrace technology, but I for one I am really excited about the future for coworking and can’t wait to be part of how Yardi will develop its proposition for the sector over the next few years.