Arrive and Work: The rise in demand for plug and play properties and the trend toward reducing decommissioning in the market

The practicality of a plug and play model is clear, but in the case of large companies, wouldn’t there be a loss in the level of office customization? How does this balance with the liquidity of the asset?

“A furnished floor certainly has more liquidity than an open space nowadays (...), but the dynamic is: the smaller the office, the less construction a company wants to do. Smaller companies tend to look for offices with a ready-to-use layout that is easy to occupy. Meanwhile, multinationals and larger companies want to give the space the identity of the company — in this case, a turn key solution works better,” said Marcello Yudi Okuyama, Commercial Manager at SYN.

In an interview with SiiLA, Lourenço Chohfi Neto, Managing Partner at CH3, reported the increasing demand for plug and play spaces, both to avoid CAPEX costs and due to the dynamics of the post-pandemic and hybrid work models. In CH3’s view, in the high-standard market, the concept is defined as follows: “The occupant receives a conceptual, modern space updated with the latest workplace trends, in addition to customization. This preference accelerates decisions and enhances the value of developments.”

Among the challenges in implementing this model is the need to keep the asset attractive to different types of occupants, preserving the same quality level and aligning solutions without major interventions. There is also a cultural shift among clients regarding decommissioning: “In the past, requests for decommissioning were common, but today we see the opposite movement: owners and occupants prefer to keep spaces ready, understanding that this increases the asset’s liquidity and creates a competitive advantage compared to other properties in the market.”

According to Chohfi, these ready-to-use spaces not only ensure greater liquidity for the asset but also reduce negotiation and occupancy time. But is the cost of delivering properties ready, equipped, and furnished recovered in negotiations?

“There is appreciation. Usually, these spaces reach higher values, without the need for rent-free periods, and often include minimum stay clauses. This shows that the market recognizes and rewards the model’s differential.”

Looking ahead at the Brazilian market, the managing partner sees the consolidation of plug and play, with expansion beyond offices, reaching shopping centers and logistics warehouses: “We already observe this movement, for example, in shopping centers, where developers offer financial incentives for tenants to carry out the fit-out instead of delivering raw units. This logic can expand to other segments as well (...) this is not a passing trend; Plug and Play is here to stay and tends to consolidate, especially in the high-standard corporate segment.”

For Tiago Alves, CEO of Regus & Spaces in Brazil, coworking spaces are plug and play in their purest form: “Coworking is true plug and play: you sign a contract and start working on the same day. In a traditional property, even if ready, you would still need internet, power, and bureaucratic steps, which take weeks. Not here — everything is already included.”

“There is no upfront investment, it’s immediate and flexible in terms of duration. You can stay one month, six months, two years, or renew monthly. In addition, we have furniture inventory and the structure to quickly customize. If a client wants to change the layout, open partitions, or replace desks, we can adapt in a few days or even overnight. That’s the differential,” added Alves.

These factors attract many companies looking for faster relocations, as well as foreign companies in the early stages in Brazil that need office models that save efforts and resources until they scale operations. But could plug and play be seen as a definitive alternative in the future?

“Several international startups such as Uber, LinkedIn, Google, and Microsoft began their operations in Brazil through Regus with this plug and play model (...) Before 2019, many of these companies used coworking only as an initial stage. The pandemic changed that: large corporations realized the advantage of flexibility, the absence of large upfront investments, and the reduction of contractual risks. Today, more than 65% of our clients are large companies. Coworking has become a main option, not just a temporary one. One such example is Petrobras.

Furthermore, the hybrid model drives decentralization: ‘Companies want regional hubs, no longer just a central office in Faria Lima, for instance. This movement is only possible with plug and play.’

In this scenario, retention rates have also increased. Tiago states that 75% of clients remain in the agile model, compared to less than 60% five years ago, and clarifies that the 25% turnover is healthy for renewal and diversity of companies within the units.

Finally, he shares an interesting fact: ‘To this day, meeting rooms account for about 10% of global revenue.’ This shows that meeting rooms remain one of the most profitable amenities, even in the plug and play model and despite the evolution of meetings to online platforms such as Zoom, Teams, and Google Meet.”