Is a back-to-the-office counter-revolution under way?
Deloitte’s latest London office “Crane” survey is published today, and it appears to show that the workplace tsarists are fighting back against the work-from-home boom – and quite successfully, too.
It puts the volume of new office starts between April and September 2021 at 3.4 million sq ft, which is an impressive-looking number by itself but even more so when you compare it to the long-term average of 2.4 million.
The average new-build’s size has also risen, by a chunky 28 per cent. So has the proportion of new developments as opposed to refurbishments. They accounted for 46 per cent of the total, up from 33 per cent in the winter 2020 edition.
Could it be a reaction to managers hauling staff in, with the refuseniks risking the chilly Siberian exile where careers go to die?
Well, not exactly. There are a variety of factors working in favour of developers and commercial property investors, which have combined to make for a much cheerier outlook for the commercial property sector.
First up is the way in which hybrid working is operating in practice.
Say you’re a relatively large employer and you are now having most of your employees in for three-fifths of every week. That still doesn’t mean you can get by on just three-fifths of the space you were using prior to the pandemic.
If the decision on which days to come in to the office is left to the employee, by far the most popular days will inevitably be Tuesday to Thursday. Getting rid of the Friday evening commute offers a handy extension to the weekend, while working from home on a Monday eases the shock of the morning slog into work at the beginning of the week.
On those three midweek days, an employer may very well find their office at something close to its pre-pandemic capacity, while on Fridays it may not be much busier than it is on a Saturday.
Even if the employer tries to manage this, some days will still generate more demand for space. Midweek days are likely to be favoured for client meetings, for example, especially if the client has adopted the three-in-five model for its own staff.
Seasonality may play a role, too. Busy times of year may require more time in the office and thus more space.
Another driver working in favour of developers is a desire among employers to offer better premises to encourage staff back, and also to encourage talented new people to join. The fancy campuses of the tech giants, which have offices in or around London, have had an impact on other businesses. They find themselves under pressure to emulate them.
Covid, and the desire for safer workplaces, has also driven a desire to upgrade. Moves put on hold during lockdown are now being made. Lease events are leading to action.
So the office is proving more resilient than might have been expected, even in the absence of a counter-revolution, and this is reflected in the views of developers. They are much more sanguine about the impact of homeworking on demand than they were at the onset of the pandemic in 2020.
More than a third (37 per cent) now expect homeworking to have no impact at all. That figure stood at 12 per cent a year ago. Nine in ten also feel more optimistic than they did 12 months ago.
On balance, more flexible, hybrid working remains a very welcome development. It is particularly helpful for women and disabled workers, both of whom have suffered from discrimination in the past.
But even if developers have grounds to feel more chipper about it than they did, there will still be victims of the work-from-home trend.
We should spare a thought for the businesses that exist to support offices. Cafes, sandwich bars, pubs and retailers will all still lose out on footfall as a result of the three-out-of-five model, even if the demand for office space hasn’t declined as much as was predicted.
The Independent (James Moore) - https://www.independent.co.uk/independentpremium/london-office-developments-hybrid-working-deloitte-b1960932.html