In the past few months, almost everyone has been returning to the office, but for the flexible office market, which holds quite a special place in the sector, we turned to Mike Hapoianu, General Manager at Mindspace Romania & Poland, for a more in-depth look that he fully delivered during BR’s recent Realty Forum 2021.
When asked if the specifics of the flex spaces market, namely shorter & more flexible contracts, meant that tenants were able to terminate their rents, Mike responded that quite the opposite happened. “Even global corporations continued their contracts. We didn’t have companies which terminated mid-contract. There were a few who didn’t renew their contracts, that’s true, but we didn’t have terminations.”
Mike Hapoianu also talked about the ongoing return to the office, and how he sees it from the perspective of a flex space country manager. “At Mindspace, people started returning to the office much earlier than in the traditional office buildings. If we take a look at our Pipera building, for months and months, the Mindspace floor was the most animated, and the reason is quite simple: we never closed shop, we stayed open from the beginning. Even in March-May 2020, we had some people coming in every day, only a few but by autumn more and more started returning, and by this spring we had tens of people working in our spaces. Now they’re in the hundreds! And if we have more than one hundred people coming in daily in Mindspace, we see the other floors of the building, all of them have at most 20-30 people in them.”
The main reason behind this, Mike believes, is that “people attract other people. Those who came back wanted to get out of their homes and to have other people to interact with. They started to return to the office, and as more people came back, others followed suit, specifically for these reasons.”
Is there a change in tenants’ profile?
When asked if he noticed any changes in tenants` profiles, Mike was very clear: “YES. In late 2020 and early 2021, most of our clients which came to Mindspace were smaller local companies. Global companies bided their time to see what happens next. Local companies, we’re talking about organizations with 30-50 employees, were able to make a decision. They came with clear criteria, which we saw every time: first, flexibility, no more long-term contracts, and that’s what a flex space means, short and flexible contracts; and second, smaller and local companies usually are coming from older buildings with countless issues, high maintenance, and they don’t want this anymore. At Mindspace, these kinds of problems don’t exist, we take care of everything and everything is simple.”
But the market is starting to move, just like the global companies, which are no longer in a wait-and-see stage. “In recent months, we started seeing more and more global clients. It’s clear, the market is moving forward, global players are making their moves. Most of the contracts signed in recent months are with global players which are entering the Romanian market and are more familiar with the flex office concept than their Romanian counterparts. They are looking for flex offices right from the start, and we see that the average contract length has changed. Before the pandemic, in Romania the flex office was just a temporary solution, now things have changed a bit because of global players who are coming and asking for the flex office concept.” Hapoianu explains.
Mike Hapoianu also talked about the advantage of flex spaces from a recruiting perspective. “Nowadays, we know very well that recruiting is not all about salary packages, which are already competitive. Today is about the extra-benefits, what companies are offering to attract people. And workspaces have become very important in this equation, that’s why companies are investing more and more in office arrangements, fitouts, and other exceptional conditions for their employees. This is very important, and for what Mindspace has to offer, we really do see a difference. We’re seeing longer contracts. If our average contract length was 1 year, now we have many global players signed for 2 years. The market is moving and we’re seeing it with our own eyes!” Mike Hapoianu concluded.