This article was originally published with Estate Agent Today on 24 September 2020.
With no clear end in sight and conflicting Government advice as to whether we should work from home or go to the office, it is becoming challenging for businesses to predict what the future of commercial office space will look like. What we do know, is the pandemic will have a considerable lasting effect of the way employers and employees choose to go about their working day.
The rising trends for re-purposed office environments
For many businesses working from home has proved to be just as effective as being in an office environment, which could drive the trend towards a blended mix of home and office working in the future. We already see this happening, with the rise in demand for properties that better facilitate home working. Subsequently, will this reduce the need for large office space?
Many employers are now looking at flexible working as a viable long-term solution and according to a recent study from the BBC, it cited ‘50 major UK employers had no plans to return all staff to the office full time’. Some well know companies have already decided to end leases and permanently close offices altogether, whilst others are taking less drastic measures and instead looking to downsize, closing expensive head offices in major city centres and opting for smaller regional office locations, where workers have more flexibility and personal preference as to where they locate themselves. Office space outside of London, areas such as the Midlands, Bristol and Sheffield could become more appealing for some employers. This also coincides with many people who are viewing remote working as the norm, now considering setting up home away from central London.
This will certainly change the purpose of office space for the future. Offices will need to present a more compelling reason for their existence and provide fundamental services that employees cannot get at home. Perhaps offices will offer more agile and attractive environments that allow for meetings, learning and collaboration, whilst accommodating the mental well-being and social needs of employees. This could mean less workstation density and reconfigured layouts that provide a choice of work settings that allow for these types of interactions.
What does this mean for commercial office space?
Will we see a shifting situation of office re-occupancy? Over the past few weeks CoreLogic has seen a rise in the number of large commercial office spaces in central locations preparing for sale. The number of commercial Virtual Tour CoreLogic are being asked to do is increasing, on both vacant or partially occupied properties. Landlords will not be able to withstand the cost of unleased office space, with many now opting to sell with the prospect of failing to lease again.
With the relaxation of Government planning rules for change of use from commercial to residential property, some empty office spaces present a great opportunity for developers to convert into apartments, thus increasing the much-needed housing supply required in the UK. This will not only encourage property investors from the UK, but also oversees.
The long-term need for office space will not be completely de-valued, but instead reconsidered to provide a more thoughtful and flexible model, as well as being sustainable throughout another possible pandemic. It is still early days and difficult to predict how many companies will downsize their head offices. Only time will tell as we continue to change and adapt the way we work.
If you’re looking to market a commercial property for lease or purchase, a 3D Virtual Tour provides potential customers with a fully immersive and detailed picture of the space and an excellent means to view the property without having to visit in person. To find out more about CoreLogic’s Commercial Virtual Tours, please get in touch salesUK@corelogic.com or visit us here.