Accelerated Workplace Trends
This crisis has forced many to work from home when they have previously not had the opportunity to do so. It has led to growing consideration of where work takes place and why; which will in turn lead to a more dispersed workforce, working more flexibly from a range of locations depending on the specific task they are faced with. Whilst the difficulties of getting large numbers of people in to the city centre/ centre of London due to the reliance on public transport may to see corporates look to redistribute their workforce throughout the country. Perhaps this means moving away from the large HQ to a series of smaller hubs. Could we now see the resurgence of the business park?
Further mid/ north-shoring from occupiers in the capital looking to achieve further cost efficiencies will drive further demand in key regional cities such as Birmingham.
Health and Wellbeing
Improving health and wellbeing has been on the agenda of landlords for a number of years, with buildings with features promoting good health achieving premiums. The nature of COVID-19 and how easily it transmits from person to person has resulted in further scrutiny from corporates on how they can occupy their workspace safely at least in the short to medium term. Smart buildings with touchless technology and the very best air filtration systems likely to be the top choice for occupiers looking to keep their workforce safe. Whilst the densification of the office, a trend we have seen intensify following the Global Financial Crisis in 2008 is likely to be challenged as workspaces are used differently.
Landlords will have to embrace and utilise technologies and practises that promote good hygiene and a healthy lifestyle otherwise they are in danger of getting left behind once the ‘new normal’ has been established.
Flex to Stimulate Growth
This pandemic will have highlighted to many occupiers the benefits of having a great degree of flexibility within their real estate solutions. However, many will be wary of occupying traditional co-working space at least in the short term, where occupational densities are high and there is an abundance of communal space shared with a many other users and their clients. Therefore we are likely to see further partnerships between landlords and established flexible workplace providers providing occupiers with access to quality conventional landlord product whilst providing a greater degree of flexibility and providing high levels of service to customers however providing this within a space the occupier can call their own. Landlords may also look at creating their own flexible workspace solutions in house to bridge the gap.
The flexible office/ co-working sector will have to endure short term pain with some casualties expected. Over the longer term there is a place for this sector in the workplace ecosystem. However the traditional business model of buying long and selling short may evolve to partnerships and management agreements with landlords becoming more common.
Flight to Quality
The great working from home experiment has largely worked with businesses reporting that their workforce have been productive, WFH and the IT holding up better than expected. This pandemic has simply accelerated dynamic working and we are likely to see businesses embrace this coming out of this crisis. However the office will continue to play an important strategic role for several reasons including; attracting talent, training opportunities and most importantly because we are social beings that need to work collaboratively with colleagues/clients face to face. Therefore we may see occupiers taking less space than previously, however, they will focus on acquiring best in class offices that will focus on collaborative working practises whilst being able to attract the best talent.
Prime rents in Birmingham will hold firm due to the limited supply of best in class office space in the city centre. Those occupiers who react quickly after assessing the impacts this pandemic has had on their business will benefit from first mover advantage allowing them to secure the space they need before competing corporates.