The latest RARE seat survey provides an inside track on the occupational performance of the SE Office market over the year.
In response to the global pandemic that has crippled businesses across the Thames Valley we are likely to witness an evolution in the definition of ‘the office’. With the UK lockdown having driven a mass involutory work from home (WFH) experiment, many companies have seen productivity boosts as well as improvements to employees mental and physical wellbeing whilst working remotely. The uptake in WFH could be a generational shift. Those employees with young family’s are keen to adopt flexible working allowing them to spend more time with children, reduce childcare and commuting costs. Conversely, there might be a reluctance from Generation Z & Millennial employees who crave social interaction and typically have compromised living accommodation without a designated working area. From our discussions with occupiers during this period it is clear that corporates who have been historically reluctant to adopt flexible working over concerns of trust and lack of productivity are now actively pursuing remote working and making provisions for WFH in their overall occupational strategy.
This fundamental change is likely to see occupier requirements shrink in size despite the new social distancing guidelines that reduce occupational densities. We anticipate that certainly in the shorter term, their will be demand for business park locations that are easily assessable and provide adequate parking creating HUB locations due to employee fears of crowded public transport which is a complete reversal from trends we have witnessed over last 5 years which have seen a drive towards town centre offices. Consolidation of HQ office buildings to single floors is expected along with a sharp increase of redundant office space arriving to the market via sub-lease once occupiers have developed their new workplace strategies.
It is anticipated the role of the office will change significantly from the traditional 9-5 set-up of being fixed to a single desk, to becoming a drop-in collaboration centre where employees can develop ideas and work on projects on a flexible basis. The danger of adopting such a strong reliance on WFH is those with administrative and repetitive roles could easily be outsourced overseas in a bid to avoid high employment costs.
Imperative to a successful WFH/office balance will be the suitability of office buildings. Whilst landlords can make some adjustments in response to social distancing requirements etc. typically, these create compromises in buildings; restricting the flow of movement through one-way routes, using doors that are designed to be fire exits & reducing lift capacity. There is currently not a single office building available in the Thames Valley that has been designed to incorporate COVID compliance which in turn may fuel demand for pre-let space. The benefit to occupiers is this allows them to have a greater input in the design & specification of the buildings to ensure their employees are safe and willing to return to the workspace. Alternatively, this could lead to developers adopting a shell & core fit-out rather than CAT-A with the further benefit of reducing the lead in time which has traditionally been a constraint when considering pre-let space.
Our Q2 2021 Seat Survey is now available for download here.