Post Pandemic Business on the Move
Tim Rayner is Joint Head of Real Estate Disputes at Irwin Mitchell and Co Heads the Office Occupier Group
The announcement by Currys last week * that it is vacating its head office in Acton and will switch to a hybrid working model for all corporate and commercial employees in the UK is a stand out example of how the pandemic has certainly changed business’ attitudes to the office as a place to work.
Currys says it plans to give its 1,400-office staff access to over 50 UK WeWork locations to work via WeWork All Access passes and in addition it will support regional hubs by refurbishing a number of spaces in its own stores across the UK, “giving colleagues even more flexibility about where they work”.
According to Liz Hamson, editor of Property Week in her leader last week, “(Currys) is thought to be the first major company to switch almost all its office space to a flexible workspace provider. It won’t be the last. The question is: how many others will follow suit and what will it mean for the office market? Are we witnessing the beginning of a paradigm shift from fixed space to flex?”
The story does bear out some of the findings from our new YouGov survey commissioned by Irwin Mitchell into the intention of office occupiers which found that UK businesses, getting to grips with the fall out following the pandemic, are now certainly reassessing their office property needs.
Our survey of over 500 office property decision makers shows that nearly half (46%) of large businesses and (39%) of medium sized companies plan to change their office space- whether by upsizing, downsizing or relocating, with one in five large businesses plan to increase their existing office space, with the same proportion looking to reduce space and 5% to relocate. In addition, 11% are looking to reconfigure their existing space.
Overall financial motives are driving those changing their space requirements, with one third of large businesses citing a desire to save on occupier costs.
But over a third (35%) also say they are responding to the changing ways their employees work following the pandemic and are looking at providing greater flexibility in how or where their employees work, as well as means to attract and retain staff. The desires from many employees for home and hybrid working is certainly bearing through, particularly as 43% of all businesses, rising to 62% of large businesses cited recruiting and retaining staff as one of the biggest threats their business.
Larger businesses also revealed what that their employees want and expect to work in, citing: modern, quality space (48%), with great WIFI and technology (44%), have agile/flexible working (43%) and be in an environmentally friendly/healthy building (37%).
And in terms of location, cities remain popular with 50% of businesses saying they’d prefer to be either in a city/town centre or on the edge of the city. This was particularly high with large businesses where 68% gave a vote to being in or around a city or major town.
All this supports some increasing interest for serviced office space – with nearly a quarter (24%) of businesses surveyed planning to change their property requirements saying they would be looking at flexible space. This rose to 35% among the large corporates, presumably attracted by the flexibility of not needing to take long leases and the ability to cater for what seem to be changing employee demands.
But the move to flexible space is not the only option. Our survey showed that the role of the office, although changing, is certainly still very much alive. We asked businesses to name the two top drivers for having an office and 40% of all businesses (and 54% of large businesses) said they see the office as an important space for collaboration and 40% of businesses said they feel their staff work better in an office.
37% of larger companies also see the office an important place to nurture employees in a way that embodies its organisational culture. 61% of large businesses and 56% of medium businesses said having the office as a place to nurture and mentor staff was important.
And this seems to be borne out by other reports that show increasing demand for more traditional office space among certain sectors- but with an emphasis on the flight to quality. According to this article in City AM https://www.cityam.com/law-firms-drive-demand-for-londons-super-prime-office-space/ property consultants Knight Frank say law firms will continue to drive demand for luxury office space in Central London as they continue in their efforts to attract the best staff and reduce their carbon footprints.
We wish Currys well with its new plans and it will be interesting to see how their total flexible working works in practice. The only question is that if its flexible working means its workforce -and potentially even individual teams – are strung across multiple sites it may be a challenge to create the collaboration and culture benefits of office working that was such a clear message in our survey.
As Adrian Barlow, our Head of Property at Irwin Mitchell said, “We are social animals. The office gives us a place to collaborate, inspire, train and mentor our staff. It is very much alive and is just evolving into a more exciting place to work.”
We’ll certainly watch how things pan out for Currys and look at the detail on how they implement their new hybrid and flexi policy. But it is clear one size does not fit all, and different businesses and sectors will take different approaches according to their business needs in this new post pandemic world.
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