Flexibility Is the Future for City Centre Offices

Office-based working seems like a distant memory for many of us, and as the Government continues to encourage ‘non-essential’ office workers to work from home, there is bound to be an impact on the commercial property sector. 

Many businesses are seemingly opting out of traditional city centre office working, not just for so long as the government advice is to work from home, but indefinitely. Back in May, Twitter boldly announced it was allowing all employees to work from home ‘forever’ in light of how successful its working from home policy had been in response to the pandemic. Some business leaders say the pandemic has made them realise how well their team can work remotely, so they’ll continue to follow this model for years to come.

But are these headlines writing off the need for prime city centre office spaces too quickly? In my view, yes. It is more likely the pandemic is simply accelerating pre-existing trends towards flexible and blended office working solutions and, even in light of further government restrictions, this view seems to be supported by the market.

The most recent data from the Savills OfficeFit Survey showed 89% of respondents thought the office would remain a necessity. With a majority of respondents only desiring to work from home on two days in any five day week, it is clear the demand for office space has not gone away. Over half of those surveyed felt that colleague collaboration, network building and personal progression were best served in an office environment. Social interaction plays a key role in learning and development but, significantly, of those surveyed, almost 87% thought that productivity levels were neutral or slightly increased when working from home.

Instead of a complete shift away from office-based working, spaces which offer greater flexibility are likely to continue to increase in demand. The popularity of serviced offices and co-working spaces which, in some cases, are fully kitted out with IT equipment and amenities, was on the steady increase pre-pandemic, but this type of working failed to dominate the market. Now, these office providers may hold the solution to an increase in demand for that blended working approach.

Serviced offices and co-working spaces tend to come at a premium, but tenants often aren’t required to fit the space out nor foot the bill for any ongoing maintenance or terminal dilapidations. Contracts are variable and tend to be offered on a rolling month to month basis or fixed annual term, rather than a standard long-term lease which may now be less appealing to some businesses given the uncertainty faced this year.

The pandemic has provided an opportunity for growth for serviced office providers, but those providers will need to cater for an increase in demand. Similarly, the already innovative business model will need to adapt to the new normal.

Whilst businesses may be looking to downsize, there will be a need to provide sufficient office space to ensure that safe working practices and social distancing measures can be complied with. An increase in demand for serviced office spaces in rural and suburban areas will no doubt be sought, and providers will need to be creative about developing existing local infrastructure to meet those needs.

The office isn’t dead, but out of date conceptions of what “office working” means might well be.

 

This article first appeared in The Herald