KHALEEJ TIMES, Tuesday, Sep 1, 2020 | Muharram 13, 1442
Dubai sees rapid surge in supply of flexible office space
Emirates:
With the demand for flexible space gaining momentum globally as
corporates adopt a hybrid working model, Dubai has been seeing a rapid
increase in the total supply of adaptable office space, according to global
property consultant JLL.
"On a regional scale, extensive strides have been taken by Dubai to ensure
flexible workspace frameworks are fixed and maintained inline with intensified
measures aimed at combating Covid-19," said Toby Toby Hall, director and head of
Office and Business Space Leasing for JLL Mena.
To meet the growing demand, there has been a rapid increase in the total supply
of flexible office space in Dubai. Although the effort is gaining momentum, the
level of flex space in Dubai remains below the EMEA average of 2.3 per cent,
suggesting there is room for further growth, said Hall.
JLL, in its latest report, said that the two interrelated trends have combined
to shape and define the demand for office space at the global and regional level
in recent years - the increased demand for flexible offices, and the growth in
remote working and working from home (WFH). "While both of these trends predate
Covid-19, the global pandemic has exacerbated their influence and their impact
on how office spaces are reimagined for many years to come," said the report.
"While we believe there is some short-term pain as demand for flexible office
space contracts, it seems certain to grow in the mid-to-long term as businesses
adjust and adopt solutions that increase their agility and reduce their response
times. The impact is also expected to translate onto the business models of
flexible office operators, resulting in a shift away from common facilities,
shared services, and hot desks, to a corresponding growth in the proportion of
private space, which ensures corporate privacy and data security," said Dana
Salbak, head of Research for JLL Mena.
"In reality, in-office work and remote work are complementary, and neither can
completely replace the other. The post-pandemic workplace will involve a
combination of three distinct office environments: the corporate office,
flexible co-working facilities and remote working. The challenge for occupiers
will be to establish the right mix and balance between the different settings
and working patterns," said Salbak.
A recent report by Savills noted that flexible offices would continue to grow as
'space-as-a-service' becomes more mainstream across markets. Those cities with
higher tech occupier bases should see the strongest increases in flex space
demand as startups seeks space on a per-desk basis."
The co-working and flexible work space trend, essentially a post-Great Recession
phenomenon, continues to bloom and grow. According to Colliers International,
co-working is one of the few expanding office demand sources. And there's plenty
of room for it to run. Even with all its growth over the past decade, flexible
office space still comprises just a fraction-less than two per cent - of all
office space in primary office markets, Colliers reports
The JLL report highlights that most companies see flex space as part of their
overall portfolio mix going forward.
"Driven by the shift in the global flex market away from SME's to larger
corporates, the Dubai market is expected to experience more concentration in the
hands of fewer but larger operators. This will inevitably involve a setback to
some independent operators and is likely to be exacerbated by short-time
financial pressures resulting from Covid 19," said the JLL report.
The pandemic is resulting in a global shift away from shared co-working
facilities to more private and enclosed spaces. "This trend is also apparent
with the majority of centres offering only enclosed offices or a hybrid mix of
enclosed offices and co-working space. Centres that were originally targeting
the co-working sector are now seeking to remodel their space to offer more
enclosed offices," it said.
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