COMMENT When the first Covid-19 lockdown was imposed in the UK in March 2020, who could have imagined that a year later we would still be living under an umbrella of uncertainty? While the roadmap out of lockdown has been very much welcomed, it’s clear that we still have a long way to go.
A topic that remains under huge scrutiny, and one that you could read about on an almost daily basis, is the impact of the pandemic on the office and how our working lives may shift as a result of the changes of the past 12 months.
In the space of a year we have seen the rhetoric surrounding city centre offices shift from “the office is dead” to “the office is needed, but it must change”. What is becoming clear now is that the office market is likely to change irreversibly while remaining at the core of most corporate businesses as they discover what agile working means for their long-term workplace strategies.
Flight to quality
It’s inevitable that we will see a contraction in the volume of space occupied by businesses in some sectors, with recent announcements from the likes of BP and HSBC confirming this. There is evidence, however, that this is simply an acceleration of cost-cutting measures that were already in train pre-pandemic. It is clear that the office space that most businesses wish to return to will be of better quality and suited to the needs of the evolving workplace environment, with the purpose of encouraging collaboration, fostering culture and instigating serendipitous conversations.
We have already witnessed this flight to quality taking place across the North West, and with key schemes coming forward such as Circle Square, Barbirolli Square and The Lincoln, we know that Manchester will be in a strong position to capitalise on those occupiers that are searching for best-in-class office accommodation.
In spite of some companies reducing the size of their portfolios, there will be a number of sectors that continue to press ahead with their requirements, and indeed expand their volumes of office space accordingly. Manchester is home to some of the UK’s most exciting and fastest-growing tech, creative and digital companies, and it is these sectors that have proven to be among the most resilient following the onset of the pandemic.
Tech talent
Manchester is recognised as one of the key cities for tech, and in fact was the only UK city outside London to be named as a “rising global contender” in Savills’ most recent Tech Cities programme – an annual research initiative that ranks the best cities globally for tech occupiers and talent.
We have seen a substantial increase in demand from growing tech occupiers in Manchester over recent years, from start-ups to global companies such as Amazon, Booking.com and HPE. And with world-class universities and high graduate retention rates, the city also benefits from a thriving talent pool, perfectly suited to further enhance the growth of the sector.
Equally, Manchester is considered to be a growth city when it comes to life sciences – again, one of the more “pandemic-proof” sectors. Along with other key cities in the north (notably Liverpool, Leeds and Newcastle), Manchester forms part of the life sciences Northern Arc, with the region witnessing more than £2bn of capital raised by companies based there in 2020. The level of investment in life sciences in Manchester continues to grow, and with exciting developments coming forward within the city, such as those along the Oxford Road Corridor, the region is well placed to support this burgeoning industry.
The pandemic has caused significant challenges for city centre office markets throughout the UK. However, there is much to be cautiously optimistic about when it comes to the future of Manchester, and given the fast-paced growth of a number of sectors, the city will continue to drive forwards as we transition out of the difficulties of the past year.
James Evans is head of office at Savills Manchester
