The Business Benefits Of Sharing

Young people love to collaborate. For them, connecting with other people, either through planned meetings or serendipitous interactions, is valuable professionally. It helps enrich their communities.

Co-working was the first place we saw this trend, as young companies deliberately chose open-plan offices with other businesses and freelancers to share and innovate together. Now, this format is transforming the office sector. Full-time workers also want to feel the co-working spirit in their offices, and employers are seeing the benefit of fostering this culture.

Co-working was responsible for 9.9% of office take-up in Europe in 2018, led by the global brand WeWork, which took one-third of the space. Stockholm and Brussels had the highest rates of take-up at almost 25% and 22% respectively, followed by Birmingham, London and Paris at about 15%. Now, traditional landlords, such as British Land and The Crown Estate in the UK, and Tishman Speyer in the US, have launched their own co-working brands.

In Vietnam, the office market is witnessing changes to overcome the challenging period of the market from many investors. Projects with flexible design, focusing on ensuring safety and health care for tenants, possessing many shared office spaces, and green construction certificate will be competitive projects in the coming time when these are the top priority standards in the market. According to Ms. Tu Thi Hong An, Director, Commercial Leasing, Savills Vietnam shared “The change in labor structure from gen X to gen Z is also becoming an essential factor for investors to consider in changing office design. With 32% of the population belonging to Generation Z: young people need open space, creativity, self-care, work-life balance, office solutions have a direct impact on the long-term recruitment strategy of the tenants, therefore, office building investors forced to consider changes in the current context.”

In Vietnam, the office market is witnessing changes to overcome the challenging period of the market from many investors. Projects with flexible design, focusing on ensuring safety and health care for tenants, possessing many shared office spaces, and green construction certificate will be competitive projects in the coming time when these are the top priority standards in the market. According to Ms. Tu Thi Hong An, Director, Commercial Leasing, Savills Vietnam shared “The change in labor structure from gen X to gen Z is also becoming an essential factor for investors to consider in changing office design. With 32% of the population belonging to Generation Z: young people need open space, creativity, self-care, work-life balance, office solutions have a direct impact on the long-term recruitment strategy of the tenants, therefore, office building investors forced to consider changes in the current context.”

The concept has also extended to homes. Co-living is becoming a housing option of choice for millennials in large cities, as they can live in a community and socialise and exchange ideas with like-minded people. Brands in this space include The Collective in the UK, Common, WeLive and Roam in the US, and You+ and Harbour in China. The format is competing with traditional residential markets, which struggle to keep pace with growing urban populations and their evolving needs.

Flexibility is another core value for millennials. In response to the financial crisis and the emergence of more sophisticated mobile technology, the gig economy has cemented employment where professionals make money by sharing their skills and talents directly with consumers. Sometimes, this is their main income, while for others it’s a ‘side hustle’. But in all cases, these professionals want their workplace to suit this flexibility.

This is a trend that corporate occupiers now want to be part of. They are taking space in co-working environments. It not only allows businesses to expand and contract more easily, but also compels traditional landlords to work harder to keep tenants and become operators of ‘space as a service’. This is likely to start a trend towards traditional lease terms on conventional office space being shortened. Landlords will also increasingly join forces with specialist operators to help them maximise the potential of their assets through branding, marketing and active management.

Younger generations seek experience rather than material goods. This is partly due to necessity: in difficult economic times they want to get the most enjoyment out of what they have. The spirit of this value is reflected in Airbnb. The effects are already being felt in the hotel industry, which is taking Airbnb seriously as a competitor. Consumers choosing a hotel instead of Airbnb are now seeking a more personal experience, and the industry is starting to respond by offering more boutique hotels in niche locations, and a focus on individual experience whether through architecture, the design of common areas or cuisine, such as The Student Hotel.

With large purchases, such as cars and houses, increasingly out of reach of young people, they are craving ownership less. For them, to borrow or share is a more efficient and environmentally friendly option. Again, Airbnb is a good example. Some are treating the service as quasi-residential, renting in different cities for three or six months. /co-working concepts targeting mobile professionals, such as Outsite and Nomad House, are also responding to the needs of ‘digital nomads’: young, adaptable people who avoid traditional leasing and ownership arrangements.

Car-sharing is also a mainstay for the younger generation, many of whom believe they will never need to own a vehicle. Instead, they rely on cheap and readily available services such as Uber, Lyft in the US, Zipcar in the UK and GoGet in Australia. This is influencing residential values by providing access to locations that aren’t well-served by public transport. Suddenly, the benchmark of the affordable late-night cab hcome has opened up new locations. Some car parks and garages may become redundant and emerge as possible future redevelopment opportunities for uses such as residential.

This millennial generation has it right when it comes to work-life balance. By making the most of technology, people are freer to work and live how and where they want. Real estate cannot fall behind in this shift in attitude. From co-working and co-living to providing personalised experiences, the heart of this change for the real estate industry will be about service.

Hybrid concepts are emerging, combining workspace with retail, student housing with hospitality, living with working. Real estate owners will be expected to offer service and experience. They will need to be closer to their consumers, working harder to remain attractive to tenants and residents, and providing easy, flexible and social environments for people to live, work and play. Only then will it have the attention of the younger generation.