Mature thanks to corona
by Eduard Schaepman, on 11 Jun 2020
While the corona crisis has brought some industries to a complete standstill, the virus is making our industry 'mature'. It's the second crisis that the flexible office market is facing, and actually, we're coping better than many had predicted: in fact, we're going to have good growth.
Maybe you think it's still too early to draw these kinds of conclusions. After all, we are a long way from getting rid of the coronavirus, and we may even have years to go before there is a vaccine. But slowly things are starting to move again: we all want to get back on track, and if we have to take some 1.5M obstacles, then that's what we'll do. So, I'm looking forward to the future of our industry, and I think it's pretty promising. Why, I'll be happy to explain.
First of all because the question is no longer whether you want to be flexible, but how flexible you can be. Flexibility is only becoming more important in the real estate world, but also beyond. Not one company has certainty, and a flexible shell offers what an entrepreneur wants: the ability to scale up or reject when it is necessary. Companies want to be able to decide quickly and easily whether more workplaces are needed, or less. Or that they no longer need an office at all, but that they start coworking in order to reduce costs. Nobody wants to make a long-term commitment now, and that will have an impact on the traditional renting. But it's logical: there is no certainty about the further course of the virus, not even about the future of your company, and then you don't need an incredibly expensive office building.
In addition, the 1.5M measures may be a challenge, but it offers opportunities for our business. Yes, we have had to make some adjustments, and yes, it is sometimes difficult to get a group of 30 people to meet. But because of those measures, there is more interest in our industry. We have already been able to help a number of companies that do not have enough space of their own and have rented a flexible office from us so that all their employees have enough place to work again. There will also be companies that let their employees work from home, or in shifts. But there will always be a need for a 'clubhouse', a place where people can meet each other and where the corporate culture can grow.
There is also a positive effect for the meeting rooms: many internal spaces of companies are now too small to put entire teams together in one room. However, the need to meet remains, and we did notice this during the corona crisis. The social aspect of work is large and should not be underestimated. Even though we no longer shake hands, that cup of coffee at 1.5M gives energy and creativity. And of course, we also face the challenge of placing large meeting groups, but as a flexible office operator, you are also flexible and can convert a large office into a meeting room in a day.
And then there's the situation in China, which makes me feel positive. The operators there have grown by 75%! Companies that have given up their permanent office space need replacement space. And yes, they prefer to go to a flexible operator to be sure that they can easily expand, reduce or reject.
Of course, there will be operators who will not survive, we are far from being at the same level as before the corona crisis. We too have noticed that. Our occupancy rate in January was 80%, and in May we were at 79%. Many contracts were still ongoing, so the first two months were good for our survival. Only now, in June, some contracts are expiring, which in some cases are not renewed, and there has been almost no new business. So, we expect to drop another 2% this month, to 77%. Of course, that's not ideal, but if you look at what has happened in other industries, we have nothing to complain about!
All in all, I dare to be positive. And yes, that's a nice feeling. But what is perhaps even better, is that we can think along with companies about how they can deal with housing costs as efficiently as possible in the coming period. Are you interested in discussing the possibilities with one of our advisors? Call 0800 22 55 874 or mail to Simba@tribes.world!