Ben Hutchen, Property Director at Orega, explains the key criteria for successful flexible office space.

The property industry now widely accepts that flexible office space has evolved from being a secondary option to a core component of modern property strategies. However, converting a difficult-to-let building into flex space isn’t a guaranteed fix. Today’s flex occupiers expect high-quality environments—often superior to traditional offices—with natural light, advanced IT and premium amenities.

With 25 offices across the UK and years of experience in joint venture management agreements, Orega understands what makes a building suitable for flex space and how to deliver strong returns for landlord partners.

So what do we think works? 

The Building

While prime, brand-new buildings are appealing, they’re often financially unviable for flex space. Orega targets Grade A- or B+ buildings that can be enhanced. Ideal floorplates are around 30,000 sq. ft, though 20,000 sq. ft in London and 25,000 sq. ft outside are considered. Layout matters—deep square floorplates limit natural light and partitioning flexibility. Instead, long rectangular layouts, like hotel corridors with offices around the perimeter, work best.
Communal amenities are essential. Existing lounges, soft-seating reception areas, and warm, welcoming entrances add value. 

In Broadgate in Leeds, where we have flex space, there is an impressive reception atrium that can be used for events. And at Ingenuity House in Birmingham a huge communal entrance hall at the base of the atrium that clients also use. 

At our top of the range flex space such as at 51 Lime Street, in the City, the building has restaurants and cafes and a gym that businesses can access. In fact the more the landlord has put into the building, or will put in, the better. Modern occupiers expect bike storage, showers, chill-out areas, and free coffee. If these are already in place, Orega can focus on internal fit-outs and finishes.

Where possible, flex space should ideally occupy around 20% of a larger building (100,000 sq. ft+).  Sometimes – such as at Ingenuity House in Birmingham - flex can enhance the building and get it “going”.  Even at Lime Street, in the middle of the insurance industry, offering flex enabled the building to be attractive to a more diverse tenant mix, which helped with letting the space. 

Orega will also consider problem assets with prolonged vacancies- if flex can rejuvenate the building.  And we will look at unconventional floor plates. Sometimes what won’t work for a conventional office user can work for us.

We then transform the space for the landlord. We know what our occupier clients want. We sort out the partitions, the fittings and the IT, managing on an economic scale, providing a decent quality fit out but at a sensible price. In our management agreement the landlord pays for the fit out and we pay for the furniture and IT/AV (the things that can be moved). But we manage the whole process and because we know what works that takes the stress away from the landlord, particularly if this is their first step into flex.

The Landlord/Owner

Orega’s management agreements are partnerships, typically with landlords. Ideally, there’s an existing relationship or familiarity with Orega’s model. These agreements are joint ventures where both parties invest to create and let out the space profitably.

That means we need landlords who are prepared to invest in the JV, getting the floorspace up to standard from empty shell to CAT B fit out. Ideally our partners would want to hold the building for the longer term, particularly given it may take 1 to 2 years to fit out and then for us to fill. For this reason management agreements are unlikely to suit a developer/investor who needs a quick return. 

And ideally our partners are not valuation sensitive- so not for landlords who have a lot of debt and may need consent from the valuers to go down every step of this route. If you are a landlord that needs steady dry income from a bank or government department, as opposed to from a multi let occupancy base, than our route may not be for you. We are much better suited in working with a family office who may look to hold in a family pension fund or with an institutional partner who is holding a property long term with a view to maximising income over the long term – we have a number of those who have proven to be excellent landlords to work with. 

Orega also partners with corporates looking to mitigate the cost of excess space. For example at 80 The Strand, we partnered with Pearson to reduce their exposure to the building. And at Mark Lane in the City of London, we helped the insurer occupier downsize and reduce costs.

Location

Location is critical.  Orega is focused on prime areas in Central London, especially near major transport hubs. Despite competition, the right product in the right location performs well. An example is our office at 51, Lime Street which was fully occupied ahead of schedule and met financial targets early.

Beyond London, Orega sees potential expansion in Manchester, with a number of successful sites including those at Balloon Street and Tootal Buildings. Other major regional cities like Bristol and Birmingham are targets for expansion as Edinburgh and Glasgow.  Beyond that Orega considers cities or towns on a case-by-case basis, depending on the business case and rent-to-desk rate ratio.

Once installed, Orega may also manage building amenities or reception services, and help tenants expand within the building as they grow—deepening our partnership with landlords.

Conclusion

The flex space market is competitive ranging from the traditional leasehold serviced office model, to landlords now doing it themselves or from new entrant providers with new coworking products competing for the space. At Orega, as pioneers of the management agreement model, we offer a proven approach. By leaving fit out and operations to us with our track record of knowing what works, we share our success with landlord and corporate partners who benefit from the uplift that well-executed flex space can deliver.