COMMENT The coronavirus pandemic will not be the end of the office, as some have mistakenly argued in recent months, but it has heralded a shift away from traditional city-centre HQs.
Enforced remote working has prompted businesses to embrace a more flexible and agile approach – a change in corporate culture that would have seemed unimaginable just eight months ago. With 61% of desk-based workers now wanting to work from home more often after Covid-19, it is clear that working norms are changing.
As businesses navigate these shifts in employee preferences alongside the financial impacts of a global pandemic, a decentralised, hub-and-spoke office model is the obvious next step.
Time for change
As employees swapped the conference table for kitchen tables, lockdown rendered the office, for some, seemingly redundant. But in reality this is far from the case: 38% of workers report that lockdown has negatively impacted their wellbeing, while remote working has also had a crucial bearing on productivity and business functionality, including strained communication and missed development opportunities.
Far more than just a desk, the office is a place of collaboration and community. In fact, many workers say they are more collaborative in the office than at home, and plenty will miss the social interaction of their usual office environment, revealing just how misguided it would be to assume that our working can be simply recreated online.
Ultimately, remote working is not a sustainable solution for businesses or people. Not only did output per hour decline by 2.5% over Q2 this year, the British Council of Offices has also seen a significant increase in musculoskeletal complaints, as employees work from home environments which are unsuited to their long-term needs. At the same time, many city centre HQs are unable to meet the challenges of Covid-19 safety requirements – from limited lift capacity to employees’ apprehension about crowded transport.
A hub-and-spoke model is the obvious solution, with a decentralised network of office space empowering people to access the amenities of the workplace closer to home, while offering businesses a more flexible solution in the wake of the pandemic. A far cry from the traditional long-term office lease, regional workspace operators can also provide more flexible terms, supporting businesses to expand and contract their office footprint as companies evolve.
A pre-pandemic trend
This demand for regional, decentralised office space is no new trend, with businesses even pre-pandemic recognising the potential value of a hub-and-spoke office model. In Nottingham, for example, the flexible workspace market grew by 93% between 2017 and 2019, while in early 2020 developers were committing to 4.3m sq ft of office projects in Birmingham, Leeds and Manchester.
Covid-19 has naturally accelerated this trend. In its September Occupier Sentiment Report, EG Propertylink reported that while property searches had risen overall as lockdown eased, the proportion of these that were for offices had fallen on pre-pandemic levels. The striking exception was that office searches had increased almost exclusively in satellite locations.
Clearly, demand in the UK’s second and third cities is growing, but even in these cities, the nature of that demand is shifting. Birmingham saw a 65% increase in office enquiries between January and July this year, but the proportion of searches for all property types, including office space, had risen, particularly outside the city centre.
Businesses are clearly beginning to interrogate their existing office commitments, thinking seriously about decentralisation and looking to the regions. The banking sector is just one example, with Virgin Money, Metro Bank and Lloyds Banking Group all considering converting underutilised branches into workspaces. In BizSpace’s own Gloucester centre, we have seen the percentage of office space taken by customers who are decentralising rise from 5% to 25% over a matter of weeks.
In the weeks, months and years to come, we should expect to see businesses in increasing volumes shun the traditional long-term leases, shifting not only away from a London-centric approach to the regions, but also away from the central core of urban areas in general. In an age of social distancing and beyond, office space is far from dead, but it is certainly decentralising.
Emma Long is managing director at Bizspace
