FEATURE
“The government is talking about a building boom to get the country out of recession and the focus for commercial new build could be outside city centres where there is more space.”
Barry Jessup, Director of mixed-use property developer First Base, believes the trend began even before COVID-19 arrived on the scene and will result in a hub-and-spokes office strategy rather than a total evacuation of city centres.
He said: “For millennials, a long commute is anathema, so this decentralisation trend is not new. In fact, office demand in regional cities and towns has increased rapidly over the last few years, especially in the Oxford- Cambridge arc and cities such as Bristol and Brighton which offer a high-quality lifestyles.
“It is now likely to accelerate as large businesses realise they can both cater to their employees’ wishes to reduce the commute and save money by adopting a hub-and- spokes office strategy.
“We’re not talking about moving to any old space - because it won’t be acceptable for the offices at the end of the spokes to be seen as second rate. They will need to provide all the flexibility, wellbeing and sustainability that employees and employers expect. Hopefully, at the end of this global upheaval we may end up with better workspace spread more evenly around.”
A hub-and-spokes strategy could end an age-old obsession with keeping the top jobs for centralised head offices – allowing people to work closer to home without having to downgrade and accept lower wages.
Global Commercial Real Estate Advisor Avison Young, with offices across the UK, expects there to be a steady rather than rapid process, however.
It saw an initial flurry of enquiries from London occupiers looking to move out of city centre locations into the M4 corridor in April and May. But most believe a central base is still a big draw and have subsequently continued with central London hubs. So, satellite offices look the most likely compromise.
Avison Young UK Principal Piers Leigh, said: “Change is in the air but my gut instinct, supported by current enquiries, is that the demand at the moment is for additional space rather than wholesale relocations.
“Many of the enquiries we are receiving are for flex space. Businesses see the uncertainty and don’t want to commit yet to the risk of taking on a five-to-10-year lease. So, they are using flex space to plant some spokes.
“We anticipate a move toward ‘working near home’ on a part time basis in the long term as people struggle with working from home full time. This will be a gradual move that starts with flex working, bringing clusters of colleagues together.
“Already, businesses are starting to shrink their footprint and add on flex space. But it’s not realistic to expect decentralisation to be fast-moving. In London, many businesses have employees living all around the wagon wheel (the M25), so a feasibility study is needed to decide where the spokes should be and how may spokes you offer.”
Not all offices moves will be to rural or suburban locations, either. Businesses are also likely to select their regional hubs based on access to talent, which is why office space close to university cities such as Cambridge and Oxford is proving popular.
Microsoft recently announced a base in Cambridge, where the central regeneration area of CB1 is building a reputation as a tech cluster, whilst Reading town centre is also flourishing.
Additionally, the government says it is committed to spreading wealth across the country by incentivising businesses to have operations outside of the capital. BT recently announced a large Birmingham hub, for instance, and HSBC has invested regionally, too.
“The pace of decentralisation is hard to predict but the underlying direction of travel is evident,” concluded Phil Oram at Crown Workspace. “Some workspace trends in the wake of COVID-19 may turn out to be temporary – whether that’s the death of hotdesking, working full- time from home or new social distancing measures. But the traditional office model, and our obsession with city centres, is shifting for the long term.”
www.crownworkspace.com/uk/
www.avisonyoung.co.uk/ www.firstbase.com
www.tomorrowsfm.com
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