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Part-Time Offices On The Rise As Tenants Balk At Paying For 5 Days

How do you solve a problem like Mondays and Fridays? Hybrid work means most occupiers have found themselves paying five-day rents for effectively three-day use. But that might be about to change.

While corporates are looking at creative ways of smoothing out demand and considering how they can sweat their commercial real estate assets harder, HubbleHQ CEO and co-founder Tushar Agarwal says his booking platform may have found one way of cracking the dilemma with a model that allows firms to identify and book only the days of the week they want.

But as the industry wrestles with constantly evolving work patterns, can it really be as simple as dropping the days when staff would rather stay home?

Occupiers are increasingly looking to models that do not involve full-week rents.

“We kept hearing that companies wanted to take office space for one, two or three days a week. Very few expect their staff to come in for five days anymore," Agarwal told Bisnow, looking back at when the flex office portal was working out how to reposition itself post-pandemic. “Pretty much every office landlord didn't want to offer it, but there were a few who decided to go with us, and we soft-launched our part-time offices product in June 2023 with just five offices.”

Agarwal said that the company recently hit a milestone with more than 1,000 part-time offices in over 250 buildings across London on the Hubble platform. He puts the rising popularity down to a slowly stabilising situation where companies are beginning to fall into more established camps in terms of how they manage their teams.

“You have companies that are adhering to a four-or-more-days-in-the-office policy, those who have become completely remote with on-demand requirements, then finally the largest group, which require staff to come to the office anywhere between one and four days per week,” he said.

“In that last group, you then have those who require attendance on specific days, those who simply set the number of days, and then those who leave it completely up to the employee. We’re seeing that specific day model as the optimum for hybrid, which is where our business idea evolved.”

Agarwal said that while small and midsized enterprises drove the initial growth, HubbleHQ’s reduced-day lease service now has a mix of clients, and many initially reluctant landlords have come round to the system, especially as day-rent levels are typically higher on a part-time basis. That allows the landlords to charge more, but occupiers still achieve lower costs overall than renting five days a week.

Examples of current clients include Transforma Travel Group, an adventure tours and school trips provider, which has adopted a part-time office strategy for its 18-person London-based team. Using Hubble’s office search, Transforma secured two part-time offices, dividing its team into a 14-person and a five-person part-time office on Tuesdays and Wednesdays. Hubble estimates that Transforma saved 50% compared with the cost of taking the space full-time, having previously primarily used on-demand coworking spaces.

Similarly, Nurole, a platform to help boards make more diverse appointments, had been experimenting with how to approach its workspace strategy post-lockdown, Agarwal said, and wanted to balance giving its team a space to collaborate while controlling costs. Switching to a part-time office three days a week, it saved 55% by switching away from having set days in a full-time location, he added.

It may also be possible to rent the dormant days to other clients, especially as the less popular Mondays and Fridays can often be offered at a discounted rate. Agarwal estimated part-time leases represent 20% to 25% of HubbleHQ’s business, with that proportion growing as the concept matures.

“What we are seeing is demand for amenities like lockers, so staff can put their work and personal items away on nonlease days, and monitors in situ for laptops to be plugged into becoming more in demand,” he said. 

The idea is still in the early days, and for a lot of companies, it won't be ideal. But it has great potential, he added. 

HubbleHQ believes specific office workdays are the most effective.

Although the situation continues to evolve, there has at least been some stabilisation around higher demand from Tuesday to Thursday, JLL Head of Flex Transactions EMEA Melissa Ansley said, and companies are looking at having core space and flexible space they can use on busier days.

Just over a year ago, JLL invested in tech platform Desana, which helps track and organise workspace use. Ansley said such tools will become increasingly important as clients look to do more with less real estate.

“Where we are now is that there needs to be a conversation between employers and employees on how we find solutions to this and allow greater stability across the Monday-to-Friday week,” she said. “At JLL, we still very much believe in the value of the office experience, and it’s for businesses to establish how their real estate choices play into their wider goals and objectives.”

CBRE’s Kate Smith, executive director in the adviser’s consulting team, said part of the desire for flexibility is that many occupiers still haven’t determined their long-term work models, but they accept that the way they use their real estate is going to change. That means they focuse on multipurpose, adaptable space that can be used for different people and different functions.

“We're trying to stop talking about return to office. It feels like that phrase might be legacy now,” she said. “We do talk about return to vibrancy. It’s the golden chalice, which does speak to the Monday and Friday dilemma a little bit.

“We're talking about a Goldilocks zone of between 60% and 70% occupancy, not too full or empty. So the office is neither a ghost town nor so full you can't find a desk or you can't jump into a meeting room.”

Smith added that although the research suggests hybrid is here to stay, sectors must also be mindful that the type of new recruits they are bringing in and the kind of industry they are working within may also dictate the employee norms.

“When you look at the skills that are being most recruited, digital skills are the highest in demand, and their requirement is often for flexibility,” she said. “So offering that is a key to attracting and retaining that talent. However, we are seeing the occupancy levels of offices in London slowly going up, so we're definitely not on a plateau. Pre-pandemic occupancy was probably about 40% to 60% on average across the week. We're now at about 40%.”

What has changed is the number of people “pointed at a building,” as she describes it: Whereas a rising headcount may have triggered a search for larger premises, now companies are working their existing space harder and managing the process of which teams come in on specific days so that one site can accommodate a larger pool of workers.

That may mean mandating core days, but she said there has been a move away from gimmicks such as free food or childcare on a Friday. Instead, the focus is on creating offices that magnetise and “earn the commute” or, for organising, for the senior leadership team to be present on every other Friday, which often attracts staff in for meetings.

Smith added that the changing nature of recruitment may also mean clients start to challenge traditional views of what makes a prime location when it comes to attracting their teams into their offices.

“We've seen occupiers make more unusual location decisions,” she said. “Traditionally, you would have preconceptions about where financial services or tech organisations go, but there has been a string of decisions that have pushed the boundaries.

“The basics in terms of access to public transport and all of the key location-making factors remain, but you need to think about the makeup of your employee base now and into the future. And therefore, where do we want to be located to retain and attract a changing workforce?” 

Related Topics: CBRE, JLL, HubbleHQ