A recent announcement by British Land is an early indicator of an emerging trend in which landlords take a more direct role in providing customer-centric vertically integrated solutions.
It has launched Storey, its own flexible workspace product, to appeal to tech business and other ‘ambitious’ businesses.
Fast moving companies don’t want to lock into long-term leases and fit out expenditure because they are unsure what their growing space requirements will be. So, for the most part they go to coworking and serviced office providers. In New York Knotel is having success providing short-term and rolling sub-lease style agreements to emerging businesses.
However, this removes the landlord from any direct relationship with the customer. Flexible workplace providers are notoriously protective of their relationship with members and see their landlord as a competitor.
In part response, British Land’s Storey will provide space for businesses to transition from coworking to conventional office. It will also support tenant’s need for space to accommodate short term or interim expansion. By the end of 2017 it will offer across part of its portfolio 15,000m2 flexible workspace for teams of 20 to 70 people.
It is a good example of a landlord willing to give up some of its ‘weighted average lease expiry’ to enhance its customer value proposition.