Member Article

Workspace Group's Chris Pieroni on how tech is changing the way we work

We’re all well aware of some of the more fanciful amenities and provisions in the workplaces of the world’s biggest tech firms.

Nap pods, beer on tap and even meditation areas at the likes of Google, Apple and Twitter have become an oft-repeated cliche of the startup landscape as employers offset the demand for more work perks in exchange for longer hours and longer commutes.

While new age-y bean bags and ping pong tables are ripe for parody, they represent the most visible aspect of a dramatic change in work culture and workplaces in general in the last 10 to 15 years.

Flexible and co-working spaces have become a key component of the trend towards well-equipped, well-connected, open work spaces pitched at smaller businesses that are genuinely pleasant places to spend 8+ hours a day in.

Gone on the days of trudging into a crumbling 1970s era concrete cladded eyesore to sit beneath soul-sapping sodium lighting in front of a low resolution, retina bothering monitor - well, for some of us at least.

One of London’s primary providers of such spaces, Workspace Group plc, bet 30 years ago that this was where the market was going, and is now reaping the rewards with some of the forward-thinking workplaces in the city.

With a portfolio of 70 properties across London housing over 4,000 small businesses, the company oversees some of the most in-demand work spaces in the capital including The Metal Box Factory in Southwark and E1 Studios in Whitechapel.

Inside their developments blend flexible space, cafes, coworking clubs and workstations, while the buildings themselves are veined with the latest connectivity and ports.

Oftentimes the guts of the building will be completely ripped out to make way for high-tech infrastructure, while space is dramatically rethought to ensure the building matches the current needs of the market, providing a perfect microcosm of the wider shift in work culture in recent times.

But what has caused this shift and where is the market going?

Bdaily London spoke to Workspace’s Operations Director, Chris Pieroni, to take stock and get a sense of how we ended up at such a pivotal inflection point, where even bigger firms and corporates are eyeing up a presence in these trendy office developments.

At the heart of it is the massive change in the proportion of small businesses to larger businesses in the last 30 years, as the UK economy has moved away from huge operators dominating the marketplace to a more innovative, entrepreneurial, startup-friendly environment.

“Smaller businesses need that flexibility to get out of that space quickly because it’s harder to predict how much space they’ll need in two, three, four years’ time.”

As Chris explains, the scale of this rebalancing has been ‘phenomenal’ and has meant the greater demand for space comes from startups and smaller businesses as opposed to the big guns. With that comes a different set of priorities and demands.

“We’ve been doing this for 30 years,” he explained. “But what’s happened over the last 30 years is that the number of small businesses relative to the number of large businesses has grown phenomenally.

“So the balance of demand is shifting far more towards smaller businesses than larger businesses. Smaller businesses need that flexibility to get out of that space quickly because it’s harder to predict how much space they’ll need in two, three, four years’ time.”

He credits the Thatcher era as the spark for the entrepreneurial surge, but believes things have really begun to kick into gear in the last 15 years as innovators and entrepreneurs armed with the hustle and ideas to succeed have proliferated (and thrived) in the capital and beyond.

Such has been the shift that university leavers are no longer filing dutifully through the doors of the big global firms but instead are dusting themselves down and having a go at company building themselves.

With one generation inspiring the next, Workspace has enjoyed booming demand for its coworking and flexible workspace offerings from hungry entrepreneurs always on the lookout for more square footage.

Still, the extent of this demand, particularly in the last six or so years, has taken the firm aback, with what Chris dubs the ‘jeans and t-shirts’ voraciously snapping up space and supplanting the suits in its co-working Club Workspace brand.

“They’re much younger, digitally-savvy entrepreneurs who are leaving university and wanting to start small businesses and not wanting to go on internships and working for big businesses. And that’s been a massive growth.”

But what do an army of Urban Outfitted, tortoise shell glasses-wearing founders and entrepreneurs need more than anything? Why a superfast broadband connection of course, and all the necessary ports and modcons for their Macbooks.

“You wouldn’t have looked at technology as a metric of property performance even five years ago, so there’s been a massive swing towards technology.”

The Macbook, and ultra portable technology in general, has in itself fuelled a revolution in the way we work, untethering workers from their desks and significantly diminishing the amount of physical space that is required to run a business and allowing firms to operate from ‘peripheral or secondary locations’.

What it has also done is catapult the quality of a building’s digital connectivity to the very top of a company or individual’s criteria when hunting for new space.

The WiredScore certification, which ranks and recognises buildings on the strength of their digital infrastructure, was launched in recognition of this fact. On Workspace’s part, they have partnered with a technology provider for the last eight years and own all the technology in their buildings to ensure that provision is up to scratch.

Chris believes that the importance of digital technology to the commercial property sector is going to continue growing in future and could even start having an impact on the value of buildings themselves.

“There’ll be a continuation of the growing demand for technology,” he predicts. “We’re rolling out the WiredScore accreditation throughout all of our buildings so it will start to affect the lettability of a building and possibly even the value of a building going forward.

“You wouldn’t have looked at technology as a metric of property performance even five years ago, so there’s been a massive swing towards technology.”

Despite all the seismic changes in recent years, Workspace’s portfolio has continued to grow at a rapid click and so too has its rental income.

Just last month the group revealed that net rental income had reached £79m, which is up 6.2% on 2016, and the firm revealed at the end of June that it had paid £158m to bring a flexible working facility to Finsbury Circus at Salisbury House.

Unsurprisingly, even the big operators have cottoned on to the need to provide more flexible terms in the current economic climate, and Chris believes that even marquee developments in the City will soon have to move with the times, marking the coworking ideal’s revolution from niche concern on the fringes to a key component of Central London’s office space.

Chris explains: “As large plates in the City become vacant, if they’re let on long-term leases it’s going to be much harder to let them.

“They’re going to have to consider doing what we do, which is carve them up into smaller offices and let them on far more flexible terms, and they are doing that. “

And the recent news that property giant British Land was looking to muscle its way into the coworking space with its Storey offering? Chris sees it as less a cause for concern than a vindication of Workspace’s approach and foresight about where the commercial property market was heading.

“It’s no surprise to us that they’ve announced they’re doing that and we’re fairly confident that all other major players are considering and will do that in the future. That’s the way the market’s going.”