Future of flex in Europe: attracting and retaining enterprise customers

In conversation with Gaël Montassier, Co-founder/Director of Strategy and Innovation at Startway Coworking & Innovation Centers.

What are the biggest opportunities for the flexible workspace market?

The biggest opportunity is to make real estate agile and to ensure workspaces suit the long-term needs for the growth and downsizing of enterprise tenants. It’s about creating all the necessary conditions within a building so that enterprise occupiers can increase and decrease their workforce according to market fluctuations.

However, our job is fundamentally a service to enterprises, SMEs and entrepreneurs.

What are the biggest challenges facing the flexible workspace market?

The biggest challenge facing the flexible workspace market includes the ability to explain to enterprise tenants (and to the real estate market in general) the benefits of working with us from the very beginning, even before the real estate search stage.

Thus, we need to work with various types of clients (occupiers), from big enterprises to SMEs, to develop our commercial offer(s) that will address both vacancy issues and at the same time sustain a viable economic model, both for us as an operator and a tenant. Our profession involves meeting and defining the precise needs of different occupiers and users, and then supporting them in their real estate needs.

Our job is also to negotiate with property owners. For example, we must convey that despite a building’s prime location, certain renovations are necessary and must be done by the property owner. This is to support flexible and agile use of the office building, ultimately to meet the expectations of enterprise tenants for the next 10 to 20 years.

Therefore, the main challenge is to clearly express to the market our value proposition, as this is crucial for balancing the office real estate market with the needs of enterprise users.

What does the future of flex look like to you?

Looking ahead, the future of flex space holds significant importance as it aligns with the evolving uses of office real estate and its adaptability to meet the demands of most users. The traditional real estate format, characterized by the 3-6-9 lease terms (long leases), is doomed to fail. Therefore, even if we have (for some legal reasons) to maintain 3-6-9 (long lease) format, we must create conditions within it to make it flexible and agile, closer to the needs of enterprise tenants and users, and for the evolution of real estate market in general.

What do you expect to see over the next 3 years?

Over the next three years, we expect that there will be very high uncertainty in all markets and sectors, especially given the geopolitical climate. This could lead to a reduction in economic activity for many companies, amidst increasing uncertainty about their future.

So most probably, we will have economic contraction in many sectors. This will include difficulty in financial and real estate markets that will lead to a significant increase in stress levels not only in Western countries but globally, that we will all have to adapt to.

How do you manage the evolving expectations of tenants?

In terms of evolving tenant expectations, they look to us for solutions that offer comfort, security, safety, flexibility, agility, and essential interoperability. We need to be innovative in the user experience, especially through digital means, which are absolutely crucial today.

Is technology important in actioning European ESG goals?

Yes. Our clients, particularly large enterprise accounts, will more often mandate us to participate in their ESG reporting, as they increasingly outsource their real estate footprint to us. So, a technology focus on ESG is critical.

We need to give them very precise reports (even per user level) on CO2 footprint, which will become a fundamental need of all enterprise tenants in the future. And here technology (but not only) will definitely help us. With IoT, we can track a client’s movements anonymously, allowing us to accurately measure their use of meeting rooms and workspaces throughout the year and provide them with a precise carbon footprint report at year’s end.

Additionally, bringing buildings to the required high environmental standards is a critical task for France and for Europe. This also includes certain technological challenges, especially in the debate over the use of HVAC systems. IoT technology shall assist us in monitoring air quality and temperature to address energy frugality without compromising user comfort.

Get in touch to find out more about how essensys software & technology can help your business navigate the current challenges facing the real estate office market.