Mindspace is a global flexible office space provider founded in 2014 in Israel by Dan Zakai and Yotam Alroy. Mindspace has 31 locations in 7 countries and 16 cities and in 2017 they opened their first hub in Poland, followed by Romania in 2018.
How do Mindspace Romania & Poland fare in comparison with other countries from your portfolio?
Mindspace was founded seven years ago in Israel and at the moment we have 31 locations across seven countries and 16 cities all over the world. Poland is a more mature market than Romania, but we pioneered the concept of flexible workspaces in both countries. We have a location in one of the most popular spots in Warsaw - Hala Koszyki. In Bucharest the first location was inaugurated on the 1st of December 2018 in Pipera (Mindspace Business District) and the second location opened on the 1st of April 2019 in Victoriei Square (Mindspace Victoriei) with a total of 6,500 m² with 950 members capacity. The concept of "flexible offices" fares well in Romania; we even had waiting lists of companies interested in exploring this novel concept.
What were some of the challenges you faced in these newly penetrated markets, pioneering can be hard work?
Our biggest challenge was educating the market. On the one hand the notion of flex space providers for companies wasn’t known and on the other people associated co-working with freelancers, so it took some time for them to adjust. However, once they come and experience the locations, they change their perception of the concept.
What would be the main differences between a "flexible office" and a "standard office"?
Traditional offices usually offer long term contracts between 5 to 10 years, whereas at Mindspace the commitment starts from one month upwards, and as of recently we also have more on-demand solutions offering entries for as little as a day or week.
Another benefit is the all-inclusive concept: 24/7 access to the offices, free coffee, free printing, internet access, maintenance, cleaning, etc. There is no CapEx for new tenants. Another interesting benefit is that Mindspace members can access any Mindspace location in the world with their membership, at no additional cost. The versatility of our spaces is another strong point, with lounge areas, meeting rooms, private phone booths and, of course, offices. Our member community consists of over 15000 members worldwide which offers great networking possibilities between companies and individuals from different industries. Finally, the Mindspace offices offer a unique design and DNA that makes working from the office an experience of working in a fun, inspiring environment.
Indeed, during this pandemic it's mentally helpful to connect with other people, however what safety measures did you take to mitigate any risks of people coming together?
Since the pandemic started, we made social distancing a norm and we thoroughly cleaned and disinfected all our shared and private spaces. The fact that we designed the offices and lounge areas to be extremely spacious (e.g., 300 m²), helped us a great deal during these trying times. Everyone that comes to work wears masks at all times and, all in all, people feel safe. We have had events (within the allowed 25 people mark) and tenants still using the space, proof that there is an innate need for human beings to work together from time to time in order to progress, even during such times. With the gradual ease of constraints, and towards returning to working from offices, our new Mindspace Seal reflects the precautions and services we’re putting in place. It’s a series of guidelines and procedures tailored to our unique workspace. This seal will be updated from time to time in the different countries we operate in, to comply with each country’s rules and regulations.
While most people feel the need to work from an office, some still prefer the work from home route, in this sense did the pandemic affect your occupation rate?
Overall, we saw a slight decrease in occupancy in Romania, but in Poland we managed to register the same performances as before the pandemic. We saw an 83% rise in demand in the Israeli market once the country started the vaccination roll-out and we expect a similar trend in other countries. As far as trends go, nowadays big tech companies and, overall, companies are beginning to adopt a hybrid work model where employees work on a rotation model of in-office and work from home. In an effort to accommodate this trend we just launched our Hybrid product offering, the new global on-demand office solutions for companies and individuals adapting to the new way of working. The offering can also serve as a complementary solution for companies who don’t want to shift their entire operation to flex, but rather need additional solutions as they transition to hybrid work models. Mindspace Hybrid includes Mindpass Daily, Mindpass Multi and The Hybrid Office, each enabling a more on-demand use of the office, as well as hourly meeting rooms for off-site training, brainstorming sessions, and more. Users can manage bookings online for daily passes and multi-access passes of 4, 8 and 12-entries per month for an even more flexible and on-demand access.
The traditional real estate industry is perceived as a conservative one, is there any particular industry that showed a peaked interest in the new product you are offering?
We can accommodate any type of industry, from freelancers to corporations with hundreds of employees (oil & gas, IT, startups, pharma, etc.). In Romania we worked with Shell, Accenture, Hootsuite, Founder Institute, KPMG and InnovX - BCR Business Accelerator. Small companies with 5-15 people that are new on the Romanian market can benefit the most from our services because we perceive a fixed tax per person not per square meter used. Since we offer ample spaces, the companies can gradually extend their personnel without paying a huge rent for immense office spaces from the beginning. So there have not been dominant industries really, rather a blend.
Taking a look into the future, what are your plans for the Romanian & Polish real estate markets?
We are extremely confident regarding both markets. The last few months, Poland performed as well as before the pandemic started, as far as the occupation rate is concerned. We are on the lookout for new opportunities through management agreements: there is a type of landlord partnership model and managed service solution. Basically, instead of signing a lease we will build a long term partnership with these landlords and manage the workspaces and amenities within their buildings. Mindspace for Landlords provides better workplace experience, at a lower cost whilst driving additional revenue for landlords and helping to meet tenant space fluctuation and on-demand needs. It is essentially a flexible, “plug-n-play” solution for startups, small companies and enterprise teams, and a responsible, scalable solution that will offer a full service, to plan, build and activate flexible spaces for landlords. This model allows landlords to enjoy higher utilization of their assets.
We are one of the first flex operators in Europe to offer flex spaces as a viable solution to disrupt the traditional lease model and we have already signed several Mindspace for Landlords partnership agreements and are seeing a steady increase in demand from new landlords. Actually, the most recent locations in London, Philadelphia and Israel are based on this type of contract, so we are seeking similar opportunities in Romania and have started seeing growing interest from developers since July 2020.
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