Shared work space concept real estate firms can learn from

Imagine you are a senior company executive on holiday in Melbourne, Brisbane or Sydney, Australia, when you come across the business opportunity of a lifetime that requires you to work away from your corner office and still be in touch with the top management and directors of your company back home. Your potential partner is also on holiday, just like you, and has no office in Australia. Both of you know no one Down Under that you can call, yet you need to hold day-long meetings, say for two to three days, as you iron out the highly-confidential deal.

That means you both need office infrastructure; someone to make and pick calls, a secure internet connection, a conducive private work space because you will each need to consult with your teams back home in confidence, a common project space where you can work together, a break-out area for the time negotiations become too hot and you need space to think, and a data centre where you can save your blueprint once you sign on the dotted line; you name it. What would you do if turning your back on the deal and taking a speed boat to the Great Barrier Reef is not an option?

Well, that is where companies like Christie Spaces come in. Founded in Brisbane 39 years ago, Christie Spaces offers businesses, big and small, creative spaces where they can carry out their day-to-day work. But there are many co-location companies, even here in Kenya, which offer similar services. What sets them apart is the fact that they offer flexible leases, ranging from a day to any number of years. What this means is that an executive on holiday can walk into any of their establishments and rent space for as long as it takes to conclude his negotiations. The day he concludes the deal is the day his lease expires.

Both the customer and the property owner enjoy one advantage from such an arrangement. For the customer, he does not need to worry about what will happen if his lease expires too early or takes longer than initially anticipated. For the property owner, he is spared the headache of having to deal with tenants who have secured sub-leases.

And because the customer shares common spaces, such as break-out areas, with other businesses and individuals, they have an opportunity to network, brainstorm ideas or simply meet interesting people either informally or through the professional social events that Christie Spaces organises for its clients every so often.

“Over the years, shared office spaces have become more community-type,” Mathew Lloyd, one of the directors of Christie Spaces, told Business Daily on the sidelines of a Schneider Electric global conference in Singapore. In his view, such communities are particularly ideal for start-ups because they can get business deals from others sharing the same space besides bouncing their ideas with the neighbour from the other company working from across the desk.

Unlike many other companies that offer similar infrastructure, Christie Spaces also offers dedicated Internet connections for each of their customers. In instances where a client requires a firewall for security purposes, this is available on request and at a fee of course. To offer this service, Christie Spaces negotiates with Internet companies for high speed broadband, what Mr Lloyd calls “a fire hose of internet”.

But in this day and age, when every co-location and co-working space has internet, there is need to offer just that one differentiator service. For Christie Spaces, that comes in the shape of data centres and racks. Working in partnership with companies like Schneider Electric, the firm has the option of either offering the full gamut of internet services, from a data centre that is either big or small enough to suit the client’s needs to racks and remote co-location of data centres. The idea of racks involves offering either a dedicated space including equipment within a data centre or just the space so that the client can install their own data centre. And if they do not have the technical capacity to do the installation, this can always be arranged as Christie Spaces has the capacity to procure technical staff for such jobs. Remote co-location of data centres makes it possible for the office space to be any distance away from the data centre itself while still enjoying full access.

“What you get is yours; you are not sharing it with the guy next door,” said Mr Lloyd.

This arrangement is ideal for companies or start-ups that are not keen on investing in co-location services or lack that capacity to do so. In the end, the client gets a service where space and technology come together to ease business operations.

And this is one of the lessons that companies in Kenya, indeed Africa, that offer co-location and co-working spaces can borrow to transform their customer experience.

What Christie Spaces is doing in Australia mirrors global trends by international firms like WeWork, the US real estate company that last year alone was managing over four million square metres of shared work spaces. In Kenya, companies like Regus, which is operating in Britam Towers, and Kofisi, which has two locations in the Nairobi, have transformed co-working spaces. But they are also signalling what the future of work will look like.

According to Regus, by 2030, at least 30 percent of all commercial real estate will be flexible workspace while flexible workspace will be worth over $10 trillion to the economies of 16 countries alone.

While quoting the Forbes 2017 emergent research, Regus, which opened its co-working space last month, says that the industry is expected to grow by 24 per cent each year.

Already, the flexible office market is worth $25 billion in annual revenue, according to Instant Group, one of the global companies that are rethinking and remaking office spaces with the aim of improving productivity, reducing costs and driving performance. All these mean that shared office space is a growth area worth investing in for savvy real estate entrepreneurs.

However, to ride the wave of such trends calls for significant investments.

“We spend a lot of money, time and effort in making the spaces and office environment that we have look really good. But we also need a differentiator to bring people in,” says Mr Lloyds.

For him, that other key differentiator is customer service and flexibility in meeting customer needs. Every time a “tenant” walks in, he or she can choose a new space to work from; and on the days they need more than one desk, this option will be readily available. On the day, they need to send bulk mail, the option of mail and package handling can be offered, meaning that the business can continue to focus on its key competencies.

One of Christie Spaces customer is a mining company based in Brisbane, and which needed space to accommodate 200 workers for as long as the mining project was ongoing. Each worker was given a desk and a key card for ease of access while Christie offered common services like office tea, printing, photocopying and cleaning.

Since the company had its own data centres, it rented the racks in which to install them. Mr Lloyds says the day the project will come to an end, the mining firm will just pack its data centres and move on to the next project. End of story. “It is a flexible commercial deal,” he says of the arrangement as he sips a glass of pink guava.

Are Kenya’s real estate investors listening? The answer is yes.

“Serviced offices is one of the best areas to invest given high yields of 13.5 percent compared to conventional office blocks offering returns of about eight,” says Edwin Dande, CEO of Cytonn, the real estate development firm.

“That is why you have seen an increase in serviced office operators setting up shop in Nairobi; Regus, Pinetree, Workable, and Kofisi, to name a few. Small businesses like such offices because they are ready to go.”