Research from our recent report, ‘A More Flexible Future: Redefining the Role of the Office’, has found that one in two office occupiers want to relocate in the next three years to enable more flexibility.
In collaboration with the BPF, we carried out a survey to gain insight on the effect that a year of national lockdown restrictions and remote working has had on occupiers and their needs and priorities for office space.
The report predicts numerous changes taking place in the office sector over the next couple of years and the fact that many UK businesses are now returning to their office spaces is set to accelerate these changes. However, we think that this presents opportunities as well as challenges, if landlords can react and adapt. We’re finding that many landlords are already aware of the number of lease events coming up over the next few years and are acting now.
If landlords weren’t in already in conversation with occupiers before the pandemic hit, then they certainly are now as part of their customer engagement programmes. Occupiers are now taking a much more active approach to their office space than they have in the past, with some even going as far as appointing in-house real estate specialists to ensure that spaces meet the evolving needs of their employees.
In positive news for the sector, our research suggests that the concept of the office is far from dead, despite this being predicted at the height of pandemic uncertainty. Only 3% of respondents to the survey are moving to a fully remote working model, while 82% of respondents agreed that office space is essential to help facilitate collaboration and maximise employee and team performance.
However, employers and employees still recognise the benefits of working from home. Many businesses are adopting a hybrid working model as a result, with time split between the office and home.
Flexibility is therefore key. 84% of respondents stated that they were considering a move to flexible space, such as serviced offices, or are already using them.
Landlords should be reacting to this change in priorities. We suggest considering providing a range of leasing options to include CAT A, Cat A+ and fully fitted plug-and-play space, together with flexibility around the length of the term of the lease or occupational arrangement. The pandemic has accelerated the need for flexible leasing and many businesses will be considering moving away from traditional leases.
This emphasis on flexibility will undoubtedly have an impact on the space a business requires overall. A third of survey respondents are looking to downsize their office space in response to more frequent remote working. However, just over a third (36%) of occupiers said they were looking for more space to allow employees to socially distance. Many indicated they were in the process of working out what space they would need; 72% are using smart technology to monitor and optimise how the office is used.
While the future of the office sector is still not fully clear, our research highlights a more positive landscape than predicted at the height of the pandemic for landlords who can adapt to ongoing changes in the sector and occupiers’ evolving needs and priorities.