"Not many independent flex firms have survived this long," says a proud Zach Douglas as he reflects on 25 years in business for Orega, the company he co-founded. "We are financially strong and secure and have plans to continue growing."

Indeed, other than the industry giant Regus, now part of the listed IWG, and David Saul and Simon Rusk's Business Environment Group, it is hard to think of another business in the space that has been around for 25 years and still has the same name – and far easier to think of companies such as MLS, MWB, Stonemartin and Avanta that have disappeared or, more accurately, been taken over, more often than not by IWG.

The business was launched by Douglas and Paul Finch "in a rented house with one spare room" in May 2001, Douglas remembers.

From two people and a first office in Staines-upon-Thames at Ash House, Orega now operates offices in 25 locations in the UK including eight in London and employs around 140 people. It is also a £55 million turnover business with aspirations to increase to £60 million next year. The portfolio size is now at 675,000 square feet spread across London, Manchester, Leeds, Birmingham, Bristol, Liverpool, Scotland and the South East.

In the aftermath of the COVID-19 lockdowns, the business dusted down and positioned for growth with the recruit of new non-executive directors, a new chief executive and senior members of the operations team and it is now full steam ahead with plans for four to five more sites a year. So how has the group journeyed here during an often tumultuous time for the office sector?

The first office the co-founding duo – who, almost inevitably, met while working together at Regus – took was the only it signed for on a leasehold basis. The space at Ash House, at 32,000 square feet, was the blueprint for its 25,000 to 30,000-square-foot sweet spot.

"We were both at Regus," says Douglas. "It was a great business and I enjoyed being there but it was not as customer-centric as we wanted it to be. Immense credit to Mark Dixon [founder of Regus], though. Without him the serviced office industry would not be what it is today."

Douglas says the group learned a very tough and quick lesson about the precarious nature of leasing serviced office space as an operator. "We soon realised as the dot.com crash took hold that it was far better to be a skills-based operator partnering with landlords as opposed to taking the lease risk ourselves. So the key change that has been a foundation of the business occurred fairly on. We were able to renegotiate with our landlord and our focus became taking on office centres of around 25,000 to 30,000 square feet via management agreements with landlords."

Orega is indeed a pioneer in the strategy, an area that many flexible office groups, including IWG, have turned to in recent years seeking more "equity light" models. Orega's management agreements see it co-invest some equity alongside landlords as opposed to taking a lease. The group operates and manages the centre and secures occupiers for the space in exchange for a fee.

"Our focus was to generally be high-end as well as refurbishing older sites to get them up to expected standards in the modern environment," says Douglas.

The change in offices has been dramatic since the group launched. "Back then it was a corner desk with two monitors and and way more demands on air conditioning," Douglas says. "Now it is thin screens. Back then people stored more physical files – everyone would have a filing cabinet – but now everything is in the cloud. Everyone was wired before but not with wifi so there was much more cabling than; there were fax machines, there were phones on desks. There used to be a 1 megabyte line or 2 meg into a building and now it's at 10 gig. And in coffee there is a huge difference. Twenty-five years ago it was all instant but now no one would drink that. It has to be mocha or flat white, which didn't exist at all. And everyone wore suits and Monday was really busy, while now it's more like it would have been on a Sunday afternoon."

Alan Pepper. a veteran in the space via senior roles at Regus, Avanta and Essensys, joined as chief executive in 2023 as Douglas moved into the role of executive chairman, to take the business on the next step of its journey. He says requirements have changed to reflect a need for less space because of technology and hybrid working. "It was 65 square feet per person before the pandemic and now it is 40 square feet at our buildings, and we are generous. In the market for flex the average is 30 to 35 square feet."

Pepper says the reason its space is more generous is its target audience has always been corporate clients. "Covid settled corporates away from more cramming, in truth, and towards an understanding that workers need space."

Douglas explains the business landed on its target tenant and the product needed. "We wanted Orega to be for corporate businesses and not so much for start-ups, and to be good quality but not a landmark building. Location has been everything. It could be a Grade B as long as it could be fitted and refurbished to be something a corporate wanted to be in. Our first building in Staines had excellent car parking with 144 spaces. The next was in Chertsey at 22,000 square feet and here we took a management agreement. Most hotels do them. It's a contract to share the risk and reward. Typically we sign for 10 years."

Orega then began to expand in the South East and key regional cities, including openings at The Colmore Building in Colmore Plaza in Birmingham and Piccadilly Place in Manchester.

Douglas says the sector is always at the forefront of the office sector offices.

"If you follow flexible offices, the sector goes into economic changes quicker and comes out of it faster. The typical term we sign now is 39 months, while lease lengths in the traditional sector have been dropping. In 2000 the Investment Property Databank benchmark for a traditional office lease length was 7.5 years and now it is four years. As things progressed we did well and made our business work."

From day one there was an aspiration to open in London and it is clear that for Douglas the first office secured in the capital remains his proudest moment.

"We always wanted to get into London but could not until 2010 when we signed for 16 High Holborn." Douglas said the business had to earn its spurs elsewhere in the country to get to London. "We had been able to fill buildings in tough markets and doing that meant we could speak to institutional landlords about opportunities in the capital."

After the Covid-19 lockdowns the group decided to position for growth, appointing non-execs in 2022. Pepper was brought in in July 2023 to create "a more structured approach" for a bigger company. Douglas adds: "Just because you set up a company does not mean you know best practice in how it is run forever. We needed a better person for this at the helm."

The operations team has expanded too, with the hires of David Kinnaird as COO and Sophie Turnbull as commercial director in 2024.

Pepper says: "Twenty-eight percent of the estate now is occupied by tenants that have been in the building more than five years and so it is less of a temporary space than it was. The pricing model has changed too. In the late 90s there was not sufficient space around in the flex space and so customers were fighting over it. The industry was used to businesses being in a building for a year or so. But then more corporates came into the space with major concerns such as Deloitte and Barclays may be having a headquarters in London and satellite space in Manchester for instance."

Douglas adds: "Occupiers and landlords realised we could help with their ongoing growth. And flexible offices and our offices proved to be resilient over time. The wider property market saw we had weathered storms and had been through some of the economic bumps over the period. The reality is some times are easier than other. The dotcom crash period was brutal. You learn what space businesses demand and that you have to stand out in a location in terms of look and feel."

Pepper says the last 24 months have seen the market improve and change again. "Conventional landlords have found they want flex in their buildings to also manage amenity and to help with the corporate environment. We need to deliver the product."

The Orega client base is established corporates and organisations rather than start-ups, freelancers or microbusinesses. Around 20% have been in the building for more than four years, while 40% of clients by number are working in the legal, professional and financial services sectors.

Major clients include TSB at Ingenuity House in Birmingham, Moonpig at The Tootal Buildings in Manchester and OpenHealth at the Old Bailey, recruiter Jackson Hogg at St Paul's House in Leeds, Sowena at The Tootal Buildings and Bucks & Berk Recruitment at Marlow International Parkway in Marlow.

The secret of its success, Pepper says, is an increased general demand for flex space as businesses do not want to be tied into long leases and need flexibility. There has also been increased demand for high-quality amenities in locations businesses could otherwise not afford.

"Post-Covid disruption to workplace trends has led to companies not wanting to commit long term as patterns settle. The market has matured. Businesses now understand flex better and see its advantages. More businesses are focused on what’s really important for them and that is often not having a lease but being able to focus on running their business," Pepper argues.

"Regional offices of established corporates and professional firms – Orega’s target client base – increasingly question the need for leases and moving to flex particularly when starting up new satellite offices in regional centres. Landlords have woken up to those trends."

Specific to Orega, Pepper says landlords appreciate the offer of an investing partner alongside them, sharing the risk.

"Landlords appreciate having a greater control of who is in the building, compared to a lease with a flex provider, and the financial transparency a partnership offers and they have woken up to the positive impact of having a flex provision within their buildings. Even tenants who take traditional leases like the fact there is a flex operator present in case they need extra space or meeting rooms.

"And landlords appreciate they can tap into Orega’s operating expertise of cost-controlled fit-outs, managing the building and securing occupiers via a broker network. We’ve flourished because we have evolved to provide what customers need and want. Flex can support the life cycle of a business throughout its development."

Going forward, Pepper says the company will be seeking "four or five sites a year to grow."

Douglas adds: "Some sites have been closed as they are no longer fit for purpose and then we reinvest in sites appropriate to [the] portfolio. In Slough the building went to residential. We lift and shift if the client has relocated."

Pepper explains where the business is looking next: "At present we are looking at core established locations in zones 1 and 2 in London. But we would look at for instance at Richmond – somewhere with its own life – when looking out a bit further. We are looking at the Wharf, King's Cross, Paddington. We are preparing four sites to open and have three more lined up. We would like a couple more in Birmingham, Edinburgh, Glasgow, Bristol. And we are opportunistic too. We would definitely look at Oxford, Cambridge and Southampton."

Pepper says that since joining he has focused a lot on improving "process and procedures".

Occupancy ranges across the estate depending on the city and region as markets tend to be different, Pepper says. London and major cities tend trend 85% to 90% occupancy, while smaller cities are different.

Major acquisitions in the last two-and a half years have been in London at Mark Lane, Lime Street, expanding at 70 Gracechurch Street, all in the City, plus 80 Strand, and the former Shell Mex House. The most recent deal has been at the Citypoint tower with Brookfield.

Douglas says the main opportunities remain in the UK, despite attempts at various times to open in the US, notably at Hudson Yards in New York. "We are not dismissing the US, but the opportunity we were exploring fell away."

Pepper adds that the other job is to make sure existing operations are secure and run properly and occupancy rates remain high.

"Retaining our customers is key. Our model remains customer-centric. It is about working with our existing landlords to expand existing successful locations and working with occupiers and landlords together to provide flexible occupation solutions.

"It is also increasingly about supporting the landlord not just with flex space but with the building as a whole – for instance running the front desk and amenities. And we also work with our landlord partners to identify other space in their portfolios that would benefit from a flex solution whether that is a full0blown flex operation or some form of hybrid."

One opportunity that will be changing the market is that created by AI. Pepper says: "It will help with consolidating more admin functions and with reporting and sourcing deals as well as some customer servicing. But it won’t replace the personal touch – relationships are key to our business."

So what has been the best deal Douglas signed? "It is always the last deal, but 16 High Holborn stands out as it got us into London and unlocked the capital. 80 Strand was a standout since – a big space in a landmark building."

"We still believe there are big opportunities in flex, even if the market is increasingly competitive," he adds.