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Uptake of flexible office space continues to grow both in London and large regional cities. The sector is suited to fast growth start-ups and scale-ups who often need quick access to office space. Despite its recent growth, the flexible office space market is currently fragmented.
Hubble aims to provide companies with a central place to find the flexible office space they need. Founded in 2014, the company provides an online platform to search, browse and compare over 5,000 flexible offices and co-working spaces in London and Manchester.
Once they have found a new office, clients can use Hubble's in-house advisors to negotiate "the best deal" with the landlord and even to "oversee the entire moving process, right up to moving day".
The company is one of the UK's fastest growing technology companies, and claims to place a business in a new office every three hours.
Having worked with Accenture, Monzo, Citymapper and Funding Circle, Hubble seems to be making significant strides towards its goal of becoming the "booking.com of office space".
The deal demonstrates the impact that technology is having on the property industry, and also how occupiers’ requirements are evolving both in and outside of London.
The investment in Hubble by leading property experts is evidence of the strength of the flexible office and co-working space market in the UK.
The last few years have seen a massive growth in demand for flexible office and co-working arrangements across the whole country.
The amount of floor space let to flexible workspace providers in central London increased by 190% in 2017. In larger regional cities, it is estimated that floor area take-up by flexible workspace providers tripled in 2018.
The growth of this particular property market is being driven by changing working habits, increasing technological demands and continued economic uncertainty.
Rather than committing to a long term lease of a defined area within an office building, occupiers are increasingly looking for:
Occupiers are also looking for offices with 'plug and play' connectivity for all their technological requirements.
However, the defining feature of this new type of office is the community that is created amongst the occupants, and engendered by the physical environment of the building itself.
Co-working spaces have long been favoured by members of the digital sector due to the 'physical social networks' that they create. Spaces like Codebase in Edinburgh, the Engine Shed in Bristol and the Trampery in London support the digital community by regularly hosting meet-ups, events and get-togethers.
Multi-national corporates such as HSBC, Samsung and Microsoft are increasingly joining start-ups in co-working buildings. This development is fuelling the continued expansion of the market, and is seen by many in the industry as a sign that these types of offices are the future of the office market.
The success of Hubble is also evidence of the way that technology is forcing the traditional property market to adapt and change.
Hubble's founders are open about the fact that they aim to compete with the traditional property agent – who they see as the 'middle-man' in the transaction between landlord and occupier and who Hubble's platform is designed to avoid.
Key to this, is the role of data and AI.
Hubble is one of the new breed of PropTech companies whose strength lies in the real-time data they hold on the market. The insights this data can produce on both sides of the supply and demand chain is the real innovation.
From building owners wanting advice on how best to market their properties, to customers wanting an online service that matches them with a building with the closest fit to their requirements - it's easy to see the benefits of 'big data' for both building owners and occupiers.
Some PropTech companies, such as Hubble, aim to disrupt the traditional model by replacing much of the property agent's role with an AI equivalent. Other businesses are helping traditional agency firms to evolve in the new data driven world.
Companies such as Property help businesses find all different types of commercial properties and connect them with the agent, rather than cutting them out the picture. VTS aims to assist property agents by standardising methods of management and reporting and giving them access to real time data on the market.
For now, Hubble's platform is solely focussed on the flexible office market. It could be argued that this particular market lends itself well to a largely automated, data driven service – as the standard terms and conditions rolled out by the landlord will require little in the way of negotiation. For other types of commercial properties, such as retail or industrial, where longer term leases still dominate, and are less focussed on providing a pre-packaged service, the role of the agent in negotiating terms seems less susceptible to change from the likes of Hubble and the new generation of PropTech companies, for now.
This publication is intended for general guidance and represents our understanding of the relevant law and practice as at February 2019. Specific advice should be sought for specific cases. For more information see our terms & conditions.
15 February 2019
by Edward Pitt