Dubai is seeing a growing demand for flexible workspaces fully integrated with technology and services from large corporate occupiers, SMEs and entrepreneurs, as part of bigger changes in the GCC office market where co-working spaces are growing at a very high pace. A study by Servcorp estimates that flexible workspaces will constitute more than 60 per cent of the total office demand in the GCC by 2025. “As the demand exponentially grows for flexible workspace over traditional office space, so does the supply, and the UAE has witnessed a significant inflow of new co-working space operators over the past few years,” says David Godchaux, CEO of Servcorp EMEIA, which recently opened the largest co-working space in the Middle East in Riyadh, following the opening of five co-working offices in the UAE over the past 12 months.
As of March there have been 50 co-working spaces and more than 80 serviced office providers in Dubai alone, according to Servcorp. “It is not difficult to build a co-working space that looks pretty on the surface, but companies, small or big, value much more than a nice desk in a pretty fit-out,” says Godchaux. “They want an integrated ecosystem to plug into seamlessly, to sell to other entrepreneurs and companies, while lowering their overhead costs with real quality support — all in a flexible manner, with no long-term commitment to salaries or employment costs. They value these aspects in so many more ways than just a desk and a beautiful boardroom.”
Company registration on a desk or a virtual office are gradually becoming possible across the region, with Dubai’s Department of Economic Development (DED) spearheading such initiatives, as authorities help entrepreneurs in keeping overhead costs low and simplifying registration.
How millennials work
A recent survey in the Middle East and North Africa (Mena) reported that young workers are changing workplace dynamics to reflect their priorities, says Prabhu Ramachandran, founder and CEO of Facilio Inc. Gallup’s How Millennials want to Work and Live report rates the generation as “exceptionally purpose driven”, with the expectation that employers adapt to their standards. They represent $1 trillion (Dh3.67 trillion) in consumer spending and 73 per cent say they’d spend more to support sustainable products and companies. This influence will be especially significant in the Middle East, with a younger workforce expected to be 75 per cent of the total number of regional employees by 2025. Sixty-three per cent of the region’s entrepreneurs are already less than 35 years of age, and 33 per cent of them want to make a positive economic impact on the community, according to HSBC’s 2018 Essence of Enterprise report.
According to Ramachandran, this shift in perspective isn’t lost on business leaders either. SoftBank, creator of the world’s largest venture capital fund, has raised its stake in WeWork — currently the world’s most recognised brand in co-working — by 25 per cent, to a total of about $10.5 billion. Proptech accelerated last year with nearly $4 billion invested across the smart buildings sector, and the stage set for an even larger scale of transformation. A recent report by KPMG states that smart city development in Mena is expected to double to $2.7 billion from $1.3 billion in the next four years. While the initial enthusiasm for co-working solutions was muted in the region, July saw the launch of the Servcorp Business in Riyadh, which is an entire building offering state-of-the-art and tech-driven co-working facilities across 29,000 sq ft of shared workspace. Earlier this year saw global business leader Honeywell Building Solutions sign MOUs to implement smart building projects in the UAE.
“Buildings consume 40 per cent of the world’s energy — the vast majority of which is produced using fossil fuels,” says Ramachandran. “Optimising the sustainability profile of pre-existing and future built infrastructure is one of the most consequential steps we can take towards a more sustainable world. While visibility into operational performance, energy spend and costs is standard among manufacturing, logistics or retail businesses, legacy commercial real estate was locked into an outdated model. A concurrent change of perspective among businesses, as well as regulatory bodies, is now driving the adoption of data-driven insights and enterprise-wide operation and management platforms.”
In light of changing workplace trends, contemporary facilities managers (FMs) and organisations are orienting their thinking towards crafting ultra-responsive, real-time, modern facilities experiences to cater to the expectations of this growing young workforce.
“Connected buildings, empowered by AI and IoT-led facilities management, are emerging as the crucial link to support the smart and intelligent buildings that the youth entering the workforce are now expecting,” says Ramachandran.