Flexible office space: The office may be bespoke, but the rights are not

What does ‘flexible office space’ actually mean? Ten years ago, the answer was relatively straightforward. Flexible workspace was largely associated with start-ups, co-working operators and businesses looking for a short-term solution. Today, the market looks very different.

The proposition

Flexible workspace now covers a wide range of products, including serviced offices, managed offices, fitted ‘plug and play’ space and fully bespoke workplaces designed around your specific requirements. In some cases, an operator will design, fit out and brand a space to reflect your business, creating an environment that feels very similar to a conventional headquarters office.

This is an attractive proposition. You can often move into high-quality space quickly, with technology infrastructure, meeting rooms, reception services and workplace amenities already in place. Managed space can also reduce the capital investment, procurement burden and project management typically associated with a traditional office move.

Legal rights

However, as the physical gap between flexible space and conventional office accommodation narrows, an important question remains: have the legal rights kept pace?

In many cases, the answer is no. Your office may be branded, customised and occupied for several years, yet your occupation will often be documented by a licence rather than a lease, an important distinction.

A traditional lease gives you exclusive possession and may also provide statutory protection under the Landlord and Tenant Act 1954. A licence, by contrast, gives you a contractual right to occupy, rather than a legal interest in the property itself. As a result, your rights may be significantly less.

Flexible workspace agreements commonly allow operators to retain extensive control over their buildings. Rights to relocate you to another part of the building, or a different building entirely, amend house rules, vary services or recover additional charges may all be built into the agreement. While these provisions support the operator’s flexible business model, they can come as an unwelcome surprise if you have invested significant time and resources in designing a bespoke workspace, relocating staff, installing technology or establishing the space as an important part of your brand and client experience.

That does not mean flexible workspace is the wrong solution. Far from it. For many businesses, flexible space provides agility, speed of occupation and operational convenience that a conventional lease cannot match. The key is to understand what you are signing.

The Birketts view

Andrew Shepherdson in the commercial real estate team advises occupiers ranging from businesses taking office space for the first time to organisations undertaking significant headquarters relocations and portfolio restructuring projects. He regularly works with clients considering serviced offices, managed space and other flexible workspace products, helping them understand how the contractual arrangements operate in practice and whether the legal rights align with their commercial objectives.

As flexible workspace continues to evolve, occupiers should look beyond the fit-out, amenities and headline pricing. The office may be bespoke, but the legal rights often remain very different from those available under a conventional lease. Understanding that distinction before signing an agreement can help avoid unwelcome surprises later.