New “flexible” work spaces could be under threat from soaring property prices

People hard at work in TechHub, in London's Shoreditch district. Image: Getty.

The traditional notion of the “office” is changing dramatically. And although there are shifts around their actual design, the most dramatic change is cost.

The cost of renting office space in many central business districts around the world is now so high that it has for a long time been out of reach for many small and medium-sized enterprises (SMEs). Knight Frank’s recently released Global Cities 2016 report shows that rents can range from approximately $33.50 (£22.00) per square foot per year in Seoul, to an eye watering $255 (£165) square foot per year in Hong Kong – by far the most expensive city to rent an office in the world.

These figures have all sorts of negative implications for those early to mid-stage businesses that benefit from being physically located in the centre of cities, resulting in them either moving or starting up elsewhere. This is concerning given how important SMEs are to the overall economic health of contemporary cities. 

The onset of the digital revolution began to disrupt the office market in the early 2000s, encouraging the growth of new types of working patterns, new career trajectories, and practices. A year-on-year increase in the number of freelancers, consultants, or those working from project to project, has amplified the demand for work space that is more flexible than the traditional office environment and infrastructure provides.

This has coincided with the rise of more “creative” career trajectories that also rely on this type of flexibility: artists and designer-makers, but also software developers, graphic designers, and more.

Into the hub

The new type of flexible work spaces they require have been on the rise for some years, and goes by a number of different names: co-working spaces, incubators, flexible work space, open workspace or hubs.

These new work spaces act as hubs for these workers from non-related sectors and firms who come together to share the same environment. To work they must be affordable (especially for early to mid-stage workers, consultants and startups), and close to centres of sector-specific activity (usually city centres or creative quarters). They also need to have flexible rental arrangements, and to provide amenities that keep flexible workers returning: this can be provided through the immediate urban environment (think Shoreditch in London or Wicker Park in Chicago), or through the building itself (as in a café or bar or other type of amenity).

They work by charging a monthly rate for desk rental or for open work space (including the provision of wifi and sometimes a land line). This creates an economies of scale, thereby offsetting the price of the larger space by subletting. They also work on a flexible membership basis, with flexible contracts allowing people to leave with short notice.

Many of these spaces, in cities across the globe, offer a variety of services and features to their members. Some curate their members in order to ensure a working environment where collaboration is central. Others gear their space towards startups and early stage businesses, by holding guest talks, seminars, business surgeries, and the provision of machinery for rent. Others still charge exorbitant rates for desk space to create opulent environments ensuring exclusivity.

Whatever the model, these spaces represent a new working landscape in the contemporary urban environment. Many view them as the new engines of economic growth and innovation.

But they are under threat. London is suffering not only from a well-documented,  but a not so well-documented workspace crisis, too. This is because the buildings used to house these work spaces are usually rented: the leases usually negotiated are short term (2-5 years) and market driven, or in some cases just below the market average.

The rise in property prices means that, once the time comes to renegotiate a new lease, landlords can raise the prices to new market highs and make a killing. This is especially true of the buildings that are close to the city centre (Shoreditch is a prime example here).

The result is that all the old difficulties of unaffordable office rents are returning to stifle emerging economic activity for SMEs once again. In London, this is threatening the growth of these new types of work space, even as they are enabling a growth in the number of SMEs and startups.

Dr. Tarek Virani is a post Doctoral Research Assistant at Queen Mary, University of London & Creativeworks London.

You can join him and guests on Friday 29 April at the Creativeworks London Festival. All sessions are completely free. For more info and to book tickets, click here


It’s not all cool bridges and very real concerns: In defence of Teesside

Just one of the many interesting bridges you’ll find in Teesside. Image: Stephen Jorgensen-Murray.

The latest entry in our ‘In Defence Of’ series...

I have to start this with a disclaimer: I’m not writing this from anywhere in Teesside. I’m writing this from Germany, where I live and work. Some of you may remember being told by Norman Tebbit, that instead of complaining that we can’t find jobs, we should get on our bikes (or, more recently, by IDS to get on a bus), and I did. I’m paid well here, to do a job that doesn’t really exist in Teesside. And yet, every time I go home to visit my family, I almost wish I’d stayed.

This isn’t going to be a very straightforward take – I’m hoping to pay my respects to Stockton, Middlesbrough and Hartlepool as well as my native Billingham – but Teesside isn’t a very straightforward place. What county is it in? Cleveland, Stockton-on-Tees, Durham or North Yorkshire depending on how old you are and where you’re standing. I always had great fun ordering online and trying to guess which of the unfamiliar options on the dropdown menu would get my parcel to me.

But regardless of where you draw the lines, Teesside is still there.

Our accent is similarly hard to pin down: Geordie, Mackem, Yorkshire, even Scouse, depending on who’s imitating us. I’ve been pegged as Irish, American and South African by determined people in the past. Our slang is stolen from Scotland, Northumberland, Newcastle and Yorkshire, and, not satisfied, some words are purely our own. Hoy, shan, howay, dinner nanny. We have as many words for classless people as the Romans did for murder.

But regardless of how it sounds to you, Teesside still talks.

On a map of the UK, Teesside sits as an isolated blob of civilisation between the Dales and the sea. Half-urban, half-rural, half-seaside, half-inland, half industrial estate and half nature reserve. A Labour heartland with a Tory mayor. Places that sprang up fully formed in the ICI rush of the 1950s, but that still have Viking place names.

We’ve been portrayed in fiction by Richard Milward, in song by Maximo Park, in statistics by Lady Florence Bell and in cinema by Sir Ridley Scott (our chemical works and power plants inspired the look of Blade Runner). More recently, we’re being portrayed in documentary in The Mighty Redcar, and in the media as an area of left-behind, white working class racists who all voted Leave. But while most of the area is whiter than the average, Middlesbrough mirrors the UK average for racial diversity and has been assigned to resettle more refugees than any other town in the UK – and more than its cut-back council can look after.

And when you look at the numbers, the proportion of the population of Teesside who voted to leave the EU is much less than many other areas. (And yes, of course I voted Remain from my now slightly more precarious home in Frankfurt, joining 100,000 other Teesside Remainers.)

We’re pitied for the loss of the Teesside steelworks and derided for blaming the EU for it (when of course it was our own government’s sabotaging of EU attempts to block Chinese steel dumping that drove that knife in). Even the people who profess to be on our side take our angry, uneducated racism as fact, baking it into the premises of their arguments, which consist of addressing our “racist but real concerns”, and how to reach us.

But whether you understand us or not, whether you miss the point or not, we’ll continue to exist, long after we’ve been forgotten again.

Billingham town centre. One of the first pedestrianised town centres in the UK. Image: Stephen Jorgensen-Murray.

Still, while we’re in the spotlight, why not see what we have to offer? Come to see our rather wonderful collection of interesting bridges. See where the first public steam train ran, from Stockton to Darlington. Visit Mima, the modern art gallery in Middlesbrough and the 1960s utopia of Billingham’s pedestrianised town centre. Feel slightly uncomfortable around all the things that are named for Captain Cook (though the replica of the Endeavour at Stockton riverside is impressive regardless on your thoughts on its captain – and it’s the best you’ll see until they work out whether they’ve found the real one yet). Wander Middlesbrough’s thriving student/hipster district on Linthorpe RoadD – despite being a punchline during my youth, Teesside University has become a respected institution. Visit Billingham’s Folklore Festival in August, where as schoolchildren we’d watch troupes of folk dancers from across the world open-mouthed, and get their autographs afterwards as though they were celebrities.

Fried chicken, white sauce and cheese make the Teesside parmo. Perfect. Image: Stephen Jorgensen-Murray.

Try a parmo. Try the Billingham Catholic Club’s real ale, and stay for the bingo, which is called by a man with the most acrobatic mental arithmetic skills I’ve ever seen. Try a lemon top ice cream from Pacitto’s in Redcar and wonder why no one else has ever done this before. Lemon sorbet and vanilla ice cream! Together at last!

While you’re at the beach, take a ride on the Saltburn Cliff Lift, the oldest operating water-balance cliff lift in the UK. Pretend Saltburn is sort of in Teesside while you’re enjoying the view. Look out on beaches black with sea coal, washed up from undersea seams and nearby coal mines. Visit the golf course by Seaton Carew to catch a glimpse of a curlew or two, and watch the young seagulls pick up golf balls to crack them open by dropping them from a great height. Visit Seal Sands, whose owners can be observed lazing on the estuary banks whenever the tide is out. Or visit Saltholme, the RSPB nature reserve, where you can see avocets, Britain’s weirdest-looking and most beloved seabird.

Nature coexists with industry on Teesside. Image: Stephen Jorgensen-Murray.

Go white water rafting, bell boating or paddleboarding at the Tees Barrage, where there are so many seals that they’ve had to put up guards to keep them out of the way. The Tees used to be too polluted even to support salmon and trout, and now we have too many of one of Britain’s largest native mammals. The return of the seals to the Tees was the first documented case of seals returning to an industrial area. You’d be surprised at how well nature can thrive in the shadow of industry, colonising the quiet fields and marshy ponds on private land that are never disturbed, haunted by sika deer and shelducks, redshanks, knots, stonechats.

Teesside has plenty to offer. What it doesn’t have is the jobs to keep its younger generations from having to get on their bikes and leave. We aren’t aliens, or Jacob Rees-Mogg’s army of goblin henchbrexiteers. We’re just like you, but with more seals and fewer employment opportunities.