Since March 2020, offices across London have been either empty or running at low capacity. The once buzzing, collaborative environments have become dormant buildings during lockdown periods, with employees being urged to work from home.
This has seen digital connectivity replace traditional working practices, resulting in much conjecture over the future of London office space. Will we ever go back to normal office life? Will remote working change the way we operate for good? These questions remain unanswered, but we do have further insights into the future.
Some tenants will get better rent deals
In response to the fall in demand, landlords have been offering longer rent free periods to tenants. Research from property agent Carter Jones showed some firms were able to get 2.5 years rent free on some new and refurbished office spaces in central London.
Also rent free periods for the fourth quarter were higher than the previous year. In the City, 28 months were typically given rent free compared to 24 the year before. In Docklands, the rent free period increased to 30 months from 26. This is based on a 10-year lease and for letting of 5000 square feet or higher. Tenants could land themselves a great deal of they’re willing to take a chance on a new space.
There’s still confidence in London office space
With employees spending most of their time working from home, many prospective tenants have been holding off property move decisions. Consequently, the office leasing market has suffered drastically.
Despite market concerns that home working is here to stay, a number of major companies in law, tech and gaming have taken up new office space in the London
Tech giant Google has also shown its confidence in the office by publicly confirming its plan for a new, 11-storey central London headquarters in King’s Cross. Called the “Landscraper”, the expansive office building will cost around a billion pounds to build. This is indeed a good indicator that businesses are looking to go back to the office.
London interior design will reflect an agile working model
The success of remote working has resulted in a culture shift that favours employee wellbeing and a better work/life balance. Therefore, expect to see office designs that lend themselves to this change.
Spaces are likely to be more “agile” in their design to give employees freedom to choose how they want to work. An increase in flexible working will also see the introduction of technology to facilitate communication between those in the office and those at home.
Agile offices were already on the rise in London before the pandemic. Take our recent London office refurbishment of sports analyst company Hudl, which saw us integrate multiple zones for different styles of working. The company also allows employees to work from home if they wish, and this is facilitated by sound proof booths for online meetings.
There will be a rise in flexible office space
While we’ve seen some London companies signing long term deals for post-pandemic office space. However, long office leases may seem like too big a commitment for smaller firms that are still establishing themselves.
London real estate consultancy Knight Frank has predicted that we will see a rise in flexible office spaces. These are essentially pre-fitted “plug in and play” workspaces that are typically available on a monthly rolling contracts.
For those that are reluctant to sign a long-term lease, flexible office space is a good alternative.
With no up-front fees or fit out costs, flex offices are a financially viable option for start-ups.
Evidence shows that many London firms see the office as central to their business plans. The way the office is designed may change to embrace an agile working model, but the desire for a fixed address that enables face-to-face collaboration will remain the same.
With such a big population of office workers in the capital, it’s likely that London will lead the way in shaping the post-pandemic workplace.
Read the full article from FIS member RAP Interiors here: https://bit.ly/3u2LSZt