Space as a Service: What Every Landlord Needs to Know about flexible workspace

For most landlords, flexible workspace sits somewhere between a niche curiosity and an option of last resort. Few truly understand it, fewer still know how to structure it well, and almost none have spent over 20 years doing nothing else.

Will Kinnear has. 

Will Kinnear - Founder of HEWN

The founder of HEWN, an advisory practice dedicated exclusively to flexible and managed workspace, Will is one of the most experienced voices in the sector. 

His career began as a graduate surveyor in Sheffield before moving to London, covering UK airports in a telecoms capacity for Rogers Chapman, and eventually landing in San

Francisco during the dot-com boom and bust! When he returned, a connection led him to become a consultant for Regus, acquiring flexible workspace sites across the UK on management and partnership agreements. By 2020, with property owners increasingly seeking his advice, he founded HEWN to advise landlords directly.

He is, by his own admission, almost impossible to bore on the subject.

The flexible workspace Market Before WeWork

To understand where the flexible workspace market is today, you need to know where it started. 

Will describes the landscape of prior to 2014 in fairly unvarnished terms: a handful of operators, Regus the dominant brand, and a product that was, in a word, vanilla.

"The whole premise of it was that it had to be as efficient as possible," he explains. "Every single square foot, as much as possible, needed to be chargeable."

Floor plates were carved into single-corridor office rows. Breakout space did not exist. Coworking was not a concept. Tea and coffee were billed as a service, as was photocopying. The product was dense, functional, and almost entirely transactional. Operators and occupiers rarely interacted beyond a front desk.

It worked, after a fashion. But it left very little room for what came next.

The WeWork Effect

When WeWork arrived in London, Will remembers walking into his first one and feeling something shift immediately.

"It was like a film set. The buzz just hit you."

Then he walked further in, saw the offices, and his enthusiasm tempered. Behind the branding and the free beer, it was a high-density serviced office, glass boxes packed tightly, tertiary light bleeding through multiple rooms. The model relied on packing occupiers into subsidise the amenity and atmosphere.

"The idea horrified a lot of operators," Will says. "They couldn't get their head around it."

But whatever its structural flaws, WeWork permanently altered the market. 

It introduced community as a product. It made breakout space standard. It shifted the relationship between an occupier and their workspace from a transactional licence to something closer to a membership. Good operators today focus on building community within the building precisely because it drives retention. The ones that could not adapt struggled to survive.

For landlords, this cultural shift carries a direct implication. The question is no longer simply whether to introduce flexible workspace into a building. It is how to do it, and with whom.

The Three Options for Landlords

When Will advises a property owner, he frames the decision around three primary deal structures, each carrying a different balance of risk and reward.

1. Operational: The first is running the space yourself as operational real estate. The owner employs staff, manages the service, and takes the full upside. Most owners, Will notes, simply cannot do this. It requires operational infrastructure that a static, institutional entity rarely has.

2. Operator Lease: The second is leasing the space to an operator, who then underlets it on licences to occupiers. This is the model WeWork became synonymous with and the one that most visibly collapsed for them when rental obligations could not be met once rent-free periods ended. It can and does work well, but it demands careful understanding of the operator’s model and underwriting of the their covenant.

3. Management Agreement: The third, and in Will's view, potentially the most structurally sound for owners, is the management agreement. Here, the operator runs the centre entirely on the owner's behalf in exchange for a performance-related return. The owner retains the real estate risk but is not exposed to an operator's insolvency in the same way. The operator, derisked, should in turn accept a lower initial fee but be rewarded for performance.

"The door has to be either fully open and everybody understands everything, or fully shut," Will says. "If you try and force through something that not everybody understands, more times than not, you end up with either a bad deal or no deal."

Right Operator, Right Asset, Right Deal

Will's advisory process at HEWN follows three stages. 

1. Asset: First, the physical asset and its suitability: location, floor plate depth, natural light, arrival experience, which floors work and which do not. 

2. Objectives: Second, the owner's objectives: are they seeking guaranteed income, amenity for other tenants, driving occupancy or simply rates and service charge mitigation? 

3. Market: Third, the local market: visiting competitor sites, assessing occupancy honestly, building realistic financial projections.

He is emphatic that no two assets are the same, and that multi-site blanket agreements with a single operator almost always serve the owner poorly as a result.

"Right operator, right asset, right deal," he says. "Bring me any operator and you could say they do flexible workspace. But whether their product fits your building and your market is a completely different question."

Next, his request for proposal (RFP) process narrows any long list of potential operators to a maximum of four, chosen on the basis of genuine fit rather than familiarity. The proposals that come back reveal, quickly, who understands the market and who does not.

Where It Goes From Here

Will is unambiguous about the direction of travel. 

Managed space is growing, sector-specific operators are gaining traction, and consolidation among operators is coming. Investors are beginning to recognise the model's cash flow characteristics as genuinely attractive.

But for landlords, the more pressing point is simpler: those who ignore flexible and managed workspace are increasingly doing so at their own expense. Not every building will suit it, and not every owner is ready. What matters, Will argues, is making an informed decision rather than an uninformed one.

"If you've got all that knowledge at hand, you can make an informed decision. The problem at the moment is the lack of in-depth knowledge and the opacity of the market."

The Insider Take

By Rico Naylor, Commercial Chartered Surveyor

Rico Naylor - CRE Insider Founder

What Will describes is not a niche product working at the edges of the property market. It is a structural shift in how occupiers want to consume space, and it is moving faster than most landlords appreciate.

The critical takeaway for property owners is this: the risk of acting without proper advice is now comparable to the risk of not acting at all. A poorly structured management agreement, the wrong operator for the asset, or an unrealistic set of financial projections can set a building back years. Conversely, the right deal in the right market genuinely can outperform a conventional lease.

Whether your building is ready for flexible workspace or not, understanding the landscape is no longer optional. The landlords who will navigate this well are the ones who get informed now, before the market makes the decision for them.

What is stopping more landlords from exploring flexible workspace seriously? Let us know your thoughts in the comments.