The corporate perception of workspace and how it can be used is evolving rapidly. Landlords are recognising the benefits of hosting start-ups and facilitating their growth as they are potentially accommodating the large blue chips of the future. And this strategy has been so successful that it is being adopted by other large occupier tenants, keen to sub-let space to growing brands that are symbiotic to their business……
There are Real Estate Investment Trusts (REITs) and traditional landlords out there that have been developing their own innovative approach to the effect of flexible space. This includes the remarkable success of London’s Canary Wharf Group’s Level 39. Its name is misleading as its success is such that it now occupies three floors of one of London’s flagship buildings and houses tech, fin tech and other assorted start-ups.
This “accelerator” is providing an additional 24,000 sq ft of start-up space for high growth companies. The long-term bet from Canary Wharf Group (CWG) is that some of these firms blossom into “unicorns” or billion pound tech firms of the future. But a lot of the value associated with this move is actually the change in brand perception that hosting tech start-ups and facilitating collaboration has for the Canary Wharf brand. Traditionally associated with financial services and seen as a destination for firms of a certain size, Level 39 has added another layer of attraction to a corporate real estate provider.
Canary Wharf is now viewed as a nurturing presence with over 160 tech companies occupying space in one of the most high profile buildings in the business world. The pay-off comes when consultancy giant Accenture takes up space at the Wharf as it wants to be close to the ideas and future potential of the fin tech firms taking up workspace there. In effect, Level 39 has become a positive brand influence for both landlord – CWG – and Accenture as its innovation lab drives the PR campaign for their brands and is a long-term bet for the future. Nice work if you can get it!
Another good example of this is the collaboration between The Office Group (TOG) and Derwent. Derwent London plc is the largest central London focused REIT. Acknowledged as one of London’s most innovative office specialist property regenerators and investors, it is well known for its design-led philosophy and creative management approach to development.
The group owns and manages an investment portfolio of 5.8 million sq ft, of which 98% is located in central London, with a specific focus on the West End and the areas bordering the City of London, with the latter principally in the tech belt. The company is listed on the London Stock Exchange and is a member of the FTSE 250.
TOG represent the new wave of flexible space specialists providing a mix of collaborative space, club lounges and private offices – all with a common thread of design led, creative focus and community – some of their buildings even incorporate private screening rooms, yoga studios, libraries and green roofs. Backed by Lloyd Dorfman (founder of Travelex), TOG have recently taken space from Derwent including: 70,000 sq ft in Henry Wood House and 34,000 sq ft on Stephen Street, both in London’s West End , and 41,300 sq ft in the White Collar Factory in London’s tech hub, silicon roundabout in EC1.
Silver Suites from Silverstein Properties has a similar focus on promoting a company’s growth from “start-up to Fortune 500” by taking high profile office space and fitting it out to a high standard. The firm took an extra 45,000 sq ft in 7 World Trade Center in 2015 having already 100 per cent leased its existing space. Silver Suites are designed for companies that are currently deemed too small for traditional leased spaces but are anticipating strong growth. Again, it is a great bet for the future and generates PR for the business. Furthermore, by diversifying their tenant mix in this way, landlords can de-risk some of the cyclical issues that can affect some sectors while others prosper. The retrenchment process that so dramatically affected the financial services industry from 2008 onwards is a prime example of the need to avoid overreliance on one sector.
Looking for Office Space?
We Operate in Some of the World’s Top Cities:
London, New York, San Francisco, Paris, Singapore, Hong Kong,
Search more locations