Originally published 6 May 2020 and updated 23 September 2020.
What next? The Future of Offices
Over the years, friends and family had given up even feigned interest in my ‘work chat’. Seemingly, planning grids, bike ratios and BREEAM scores are pretty dull unless you work in the offices sector.
But that’s all changed now – fuelled by BBC polls, newspaper editorials and government interventions, it seems everyone now wants to talk about the future of offices and (with some degree of relish) whether my profession is fast becoming an endangered species.
The good news for the offices sector is that the hysteria appears to be dying down. Business leaders that were calling time on the office, now accept that they’ll continue to have an important role in future. Likewise, after 6 months at home, most office workers admit that getting together with clients and colleagues is desirable, at least some of the time.
The more worrying news is that this improving sentiment hasn’t yet resulted in the reoccupation of office space in the UK’s cities. London’s major landlords are reporting office occupation stuck somewhere between 15 and 25% with only a relatively modest increase since the beginning of September.
With our city-centre ecosystems at stake, commentators have pointed the finger of blame at government mismanagement, corporate fear and an arrogant form of idleness that has permeated into Britain’s workforce. They argue that corporate Britain just needs to muster some courage, get people back at their desks and get on with the business of recovery.
Whether or not you believe in this view, I think it misses the point. The issue for the offices sector is that people are working at home because technology enables it, employers support it and they enjoy it.
Let me be clear, I’m not suggesting the end of the office. As I’ve written before, the world’s most successful businesses will continue to be those that bring people together rather than disperse them at home.
However, our industry can’t afford to ignore this shift in attitudes. COVID-19 may have triggered an office exodus, but it’s improbable that this exodus will be entirely reversed when the pandemic is controlled.
We need to learn the lessons of the retail sector and be more pro-active in embracing change. The last 6 months suggests that we’re now entering a new phase of office working, with individuals provided with greater autonomy in choosing where they want to work. The future office must adapt to this change becoming a place where people want to be rather than a place where people are obliged to be.
What may this mean in practice? Most important of all will be location. In a future where people commute less often, it is quite plausible that people will commute further, balancing 2 or 3 days in the office with improved quality of life and lower living costs. This would point towards offices in locations which are both accessible to broad catchments and serviced by vibrant amenity for meetings and leisure. Office occupiers considering a centralisation of their real estate; reducing the quantum of space but paying more for an easily accessible location, will become much more common. Cut price office developments which are hard to reach and rely on the sandwich van will struggle.
What about the office environment itself? One of the mistakes of business during lockdown has been to over-emphasise the rise in productivity from home working. I don’t think any of us are surprised that, for many, the peace and quiet of home supports productive cerebral working.
However, measuring the value of the office environment for less tangible outputs such as innovation, knowledge-sharing and relationship building has always been more tricky. In a future where people can work from a desk at home, the office must excel as a place for meeting and collaboration.
- Architects need to consider how to meet these future needs in the configuration and specification of office space.
- Developers need to be creative in ensuring that a visit to the office is more than just ‘going to work’ but an exciting and inspiring place that attracts workers much like a shopping centre does its customers.
- Larger campuses that have the economies of scale to develop and deliver a sense of place have a real opportunity to differentiate.
- Owners of stand-alone assets need to take further the concept of Business Improvement Districts, working collaboratively with neighbouring owners to deliver an inspiring streetscape.
Most talk has been about the physical manifestation of the office, but we shouldn’t forget the leases that underpin value. For larger HQ’s, where the capital investment of the tenant is high, I have no doubt that longer ‘institutional’ leases will have a future.
For smaller offices, I’m less confident. As we navigate our way through this pandemic and adjoining recession, I see occupiers taking shorter leases or licences as a means of mitigating the risk of future lockdowns or because they can’t confidently assess their future occupational needs. In the longer term, I think that this need for flexibility will remain, not because of the pandemic, but because smaller occupiers will become less defined by their office space, favouring landlords that can offer flex space in a managed environment where workers can leverage communal services and a sense of community.
So, what’s next? The office is here to stay, but not in the form we know it. There will soon come a time (you may say right now..) where the opinions of an office agent are no longer newsworthy and the future of the office falls from the media agenda. In the meantime, we all need to listen and learn.