Flexible Office Space Innovation – How Occupier Requirements Change Provision of Space

Felix Gauger, Benjamin Wagner and Andreas Pfnür

ERES from European Real Estate Society (ERES)

Abstract: Economic changes, increasing competitive pressure, and growing dynamics in organizations require flexible and efficient provision of space. These altered occupier requirements lead to changes within the office sector. In today's knowledge work, the purpose of office space is extending from a place of pure space provision and productivity to a social place that allows social interaction, creativity, and more space for informal meetings. To address these new requirements, corporate real estate no longer measures the provision of space in terms of pure costs, but increasingly includes factors such as employee satisfaction, quality and service, collaboration, and social interaction. Flexible Office Spaces, or so-called “Coworking Spaces,” are characterized by the provision of temporally and spatially flexible space with a high service orientation. This operator model has the potential to change the real estate value chain. The operator leases larger areas on a long-term basis, (sub)leases individual managed workplaces to the user and thus provides a risk and maturity transformation. With an operator as an intermediary, the way in which commercial space is provided is changing. This process within the real estate industry is driven by the occupiers. This research project investigates to what extent Flexible Office Space meets the (new) requirements of the occupiers for provision of space. We apply a model of requirements and value contribution of space provision on the provision of flexible office space. For an empirical analysis, 59 corporate real estate managers from large German companies were surveyed. Correlation and bivariate regression analyses were used to show which of these requirements are related to the use of Flexible Office Space. The results indicate that Flexible Office Space is an alternative form of space provision for large companies. We find that requirements for flexibility, innovation, collaboration, and creativity as well as employee well-being and satisfaction correspond with Flexible Office Space. However, they do not associate Flexible Office Space with an increase in work productivity, corporate identity, corporate social responsibility, or a strengthening of employer branding. The results enable CRE managers to assess which requirements for space provision are addressed by Flexible Office Space. This helps in deciding whether it is appropriate to use Flexible Office Space within the real estate strategy.

Keywords: Coworking; CREM; flexible office space; space provision (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2021-01-01
New Economics Papers: this item is included in nep-isf and nep-ure
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