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What is the driving change in agile office solutions, and how is the market reacting? -- John Williams & James Rankin

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Impact of changing customer profiles and Occupier & amenity provisions of the future
Coworking Europe Conference 2018, Amsterdam, Day 2
#CoworkingEU

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What is the driving change in agile office solutions, and how is the market reacting? -- John Williams & James Rankin

  1. 1. Private and confidential © Instant 2018 What is driving the change in agile office solutions ….and how is the market reacting? Coworking Europe Amsterdam, November 2018
  2. 2. Private and confidential © Instant 20182 • The Shape of the Industry Today • Changing Occupiers and Operators of Flexible Space • What Does the Future Hold?
  3. 3. Private and confidential © Instant 2018 A unique range of propositions focused on client business requirements 3 CORE / HEAD OFFICEY Flexibility or Agility? N Market Entry and Exit Mergers & Acquisitions Employing Flexibility Running Projects HQ Office Occupancy at Speed CLIENT DEMAND 0-24 months 24-60 months 60+ months Account Management Instant Serviced Solutions Instant Managed Office Solution INSTANT SOLUTIONS Lease Length Independent Supply Chain Transact. FM PMDesign Constr.
  4. 4. Private and confidential © Instant 2018 Delivering significant business benefits Whether Instant is managing a client’s global estate, a flexible portfolio or single workspace, we drive to deliver several core benefits. Instant tailor solutions in line with our client’s business strategy and deliver success in line with their goals. 4 Access to expertise/an extension of our clients team Increased speed to market due to shortened procurement cycle Enhanced flexibility Simplicity – one short form contract Cost certainty Reduced administrative burden International capability and compliance Independent solutions that share risk
  5. 5. Private and confidential © Instant 20185 The Shape of the Industry Today
  6. 6. Private and confidential © Instant 2018 Fact or fiction. The Global Flexible Office Market 6 Sources: Instant proprietary data, Deskmag ‘2018 Global Coworking Forecast’ GLOBAL MARKET SIZE $26 billion based on industry revenue 30,000+ flexible office centres 15,500+ co-working spaces Forecast growth of 15% per annum
  7. 7. Private and confidential © Instant 20187 Western Europe 552 Asia 238 Central America 11 South America 19 North America 406 Oceania 96Middle East 46 Eastern Europe 36 Caribbean 1 Africa 32 Centre growth 2014 – 2018 (YTD) 2014
  8. 8. Private and confidential © Instant 20188 Western Europe 677 Asia 418 Central America 15 South America 31 North America 595 Oceania 143Middle East 49 Eastern Europe 27 Africa 82 Caribbean 2 Centre growth 2014 – 2018 (YTD) 2016
  9. 9. Private and confidential © Instant 20189 Western Europe 932 Asia 564 Central America 73 South America 54 North America 605 Oceania 230Middle East 61 Eastern Europe 56 Africa 91 Caribbean 5 Centre growth 2014 – 2018 (YTD) 2018
  10. 10. Private and confidential © Instant 2018 The growth of choice
  11. 11. Private and confidential © Instant 201811 Confusing… What does the flexible industry in Europe look like today Regus Buro Club: 1% WeWork: 1% Orbit: 1% Flexspace Bruntwood Other
  12. 12. Private and confidential © Instant 201812 …but Growing What does the flexible industry in Europe look like today
  13. 13. Private and confidential © Instant 201813 London Berlin Madrid Paris Amst. Market Size (sq. ft.) Growth (YTD) London 20m 13% Paris 2.6m 14% Madrid 2m 9% Berlin 1.9m 10% Amsterdam 1.2m 11% Europe’s key cities
  14. 14. Private and confidential © Instant 201814 Key city pricing over the last 3 years
  15. 15. Private and confidential © Instant 201815 ….
  16. 16. Private and confidential © Instant 201816 Source: Instant proprietary data Desk spaces are getting smaller Centres are getting larger Increased amounts of private space Increasing volumes of centres providing hybrid space Price pressures for those not able to add value or provide a differentiated experience European centre movements
  17. 17. Private and confidential © Instant 201817 Occupiers and Operators of Flexible Space are Changing
  18. 18. Private and confidential © Instant 2018 Industries across many sectors are undergoing disruption Real Estate is no different, it is becoming a service-lead industry 18 •Automotive •Hospitality •ICT •HR •Real Estate
  19. 19. Private and confidential © Instant 2018 As a result, businesses are demanding more from their third largest cost… 19 Enhanced flexibility Transparency & cost certainty Reduced liability & reduced risk Increased speed to market
  20. 20. Private and confidential © Instant 201820 Proliferation of brands & acquisitions
  21. 21. Private and confidential © Instant 2018 Landlords have begun to react 21
  22. 22. Private and confidential © Instant 201822 Corporate occupiers are making their presence felt within the flexible industry. It is thought that between 25% and 30% of flexible space within London is now occupied by corporate organisations, with the proportion increasing year on year. As the type of occupier of flexible space changes, so does the profile of the lease. We have seen a steady growth in the number of 18+ month terms as companies with larger teams look for more stability and less disruption while maintaining increased flexibility compared to traditional offerings. A changing demand profile
  23. 23. Private and confidential © Instant 201823 • Standardised • Longer • Higher priority • Compliant • Must meet company • standards • Terms and contracts • Must meet company standards • Restricted available space on a global level • Longer time lines to move in • More likely to look for a global partner Corporate occupiers face unique challenges PROCESS BUILDING COMPLIANCE FLEXIBILITY SECURITY IT
  24. 24. Private and confidential © Instant 2018 The industry is changing 24 Source: Instant proprietary data Marketing is changing brand awareness and perception The terminology is changing *Google Trends for UK based search
  25. 25. Private and confidential © Instant 201825 What do occupiers think of the industry?
  26. 26. Private and confidential © Instant 2018 Changing occupier demands Flexibility remains the most valuable feature for today’s occupiers but the core features of an office remain the largest drivers although change is taking place. 26 Source: Instant proprietary data
  27. 27. Private and confidential © Instant 201827 What does the Future Hold?
  28. 28. Private and confidential © Instant 201828 Industry adoption
  29. 29. Private and confidential © Instant 2018 Rates are falling in NYC and London as supply is thought to be catching up with demand. • 2 months out of 12 free • 20% off Market saturation 29
  30. 30. Private and confidential © Instant 201830 “Niche-ification” of the market
  31. 31. Private and confidential © Instant 201831 Brands, brands, brands
  32. 32. Private and confidential © Instant 2018 32 Consolidation of the market
  33. 33. Private and confidential © Instant 201833 EU forecast Number of centres Growth 14% centre growth CAGR 19% space growth CAGR 42 million sq m of flexible space by 2023
  34. 34. Private and confidential © Instant 201834 Do you have any questions?
  35. 35. Private and confidential © Instant 2018 The content of this document is private and confidential. No representation or warranty, whether express or implied, is given as to the accuracy or completeness of the information contained within. Pricing and availability are subject to change. Instant does not accept any liability nor responsibility for any consequences of you or anyone else acting, or refraining to act, in reliance of the information. All intellectual property rights within this document are the sole property of the Instant Group and may not be copied or distributed, in whole or in part, without written consent. Photography: Instant photography shot on location at Fora (Central Street) and Halkin (Paris Gardens). All other images used under license from shutterstock.com. Thank you Contact James Rankin Research and Insight Manager +44 (0) 7393 242 750 james.rankin@theinstantgroup.com www.theinstantgroup.com www.instantoffices.com John Williams Head of Marketing +44 (0) 7957 635 892 John.williams@theinstantgroup.com www.theinstantgroup.com www.instantoffices.com

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