Flexible office space lets UK firms beat Brexit uncertainty without committing to long-term leases
Continued uncertainty around Brexit is having a range of consequences for business in the UK, with some choosing to move operations to the continent. Although the UK officially left the European Union at the end of January, trade negotiations between the two only recently began in earnest, with details of what any eventual deal could look like still thin on the ground.
According to some observers, the prospect of a no-deal Brexit remains a real possibility. This uncertainty is prompting some companies to pursue a foothold on the continent by opening a subsidiary office, while others are relocating there completely.
More than 100 companies have so far relocated from the UK to the Netherlands, while oil giant Total recently announced plans to move its financial hub from London to Paris.
And it’s across the Channel where many companies are currently eyeing up flexible office space, with low costs and the ability to upscale or downsize at pace proving to be a big draw. “According to a recent survey, 15% of British CEOs are considering expanding their business in a European country and we are seeing an increased demand,” says IWG’s country manager for France, Christophe Burckart.
He puts France’s appeal to British businesses down to two things – geographic closeness and business culture, with investment and entrepreneurship being two of the main factors in driving the country’s economy forward. “Generally speaking, France is a service nation for R&D and other industries in Europe,” he says. “In 2019, France was the only country in Europe that showed growth in investment projects, while other large economies like Germany and UK have seen a decline.”
He adds that investment – both practical and political – by the government has also proven a huge boon to the country’s attractiveness to business. “France has a dynamic right now of attracting foreign investment,” Burckart says. “One reason is the high quality of infrastructure education and the engagement of the current government in favour of investment and innovation.”
The jewel in the crown of the country’s business real estate is undoubtedly La Défense, an enormous business district located 3km west of the centre of Paris, which is also currently home to a new IWG Spaces site. “We opened that site in January 2019 and in March that year it was full,” he reveals.
As the largest business district in Europe, and the fifth-biggest on the planet, it’s no surprise that companies concerned about access to European markets after Brexit are eyeing up the area. And it’s not just startups and entrepreneurs either, with major players taking an interest too. “We’ve seen a 20% yearly increase in flexible office working nationally. A third of our business now is with very large accounts, whereas they weren’t before. “They’re using us strategically and not just tactically,” Burckart says.
He cites flexibility as one of the main reasons for the growing popularity of flexspace: companies that may just want to dip their toe in the water, with the option to scale up if things go well, find it particularly attractive as a jumping-off point in another country. “When you start something like that, you're not sure at first how much space you’ll need,” he says.
The flexible office market has been growing steadily in France, according to Burckart, with the country’s busy cities and roads helping to prompt a generation of workers to choose a more flexible way of doing business. “Traffic is horrible in the largest cities of France, like Paris and Bordeaux, so people like to work through the network and use the office that’s closer to where they are at that particular point in time,” he avers.
With continued uncertainty around Brexit, it’s clear that for companies wanting to experiment with a site in France – or elsewhere on the continent – without uprooting completely, flexible office space is a compelling solution.
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