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What does the increasing demand for flexible office space mean for valuation, and how is RICS supporting members in this field?
Flexible workspace means different things to different people, from the quietly efficient hum of a traditional serviced office and business centre to the dynamism of the latest co-working spaces. The concept might also bring to mind workers in a corporate environment queuing at a desk-booking system or eating cereal at their computers in the name of improved space use.
In the modern market these are arguably all forms of flexible workspace. Valuers operating in this field therefore recognise the models and motivations for each, and have developed techniques to report value accurately and appropriately. The main motivations for flexible workspace today include the aftermath of the 2008 financial crash, technology shifts, and a longer-term trend for an increased number of small business and sole practitioners.
As with most recessions, the 2008 crash led to an oversupply of stock and price rationalisation, but in positive terms increased creativity and prompted a more liberal attitude to letting and space use. Concurrent digital developments meant that some companies and operators no longer needed to install complex IT structures, storage or filing systems, or seat colleagues doing similar work together, but could get new offices up and running effectively in a very short time. Meanwhile, a generation of tech-savvy graduates and others looking to work on their own terms is attracted to operations that provide facilities such as meeting rooms, private space, client areas and fast tech as well as a great cup of coffee without contracts or liabilities, even at a premium price.
Although these factors have all influenced the development of the modern, flexible market, some valuers have found it misleading to describe it as new: business hubs have grown up around key financial and educational centres since at least...