Is an Office Revival Inevitable or Unlikely?

Back in July (which seems like a lifetime ago now), we wrote about how many businesses, including major banks, were making moves to return to the office. 

Although 60,000 of Barclays’ staff were working from home at the time, 20,000 were back in offices, branches and call centres. Yet following the latest guidance from the government that people should work from home when they can, the bank is telling “hundreds” of UK staff who had gone back to the office over the summer to return to WFH. 

And they’re not alone. Other financial powerhouses, including Societe Generale and Lloyd’s of London have also instructed staff to work from home again. So, is this the end of the office or just another short-term workplace hiatus?

At First Office Hub, we think it’s the latter. 

Here’s why:

1. A return will benefit the economy 

When it’s safe to do so, a return to the office in some form will benefit the economy. New data from the Centre for Economics and Business Research (CEBR) shows that spending in businesses near central London offices was “lost or displaced” between when the lockdown began in March and July. 

By assessing Google mobility data, CEBR was able to discern that the number of people going to the workplace in London during the height of the lockdown in April was 77% lower than before the pandemic took hold.

This has cost central London £2.3bn.

“During the months of March to July virtually everybody that could was working from home, so we estimate that the lost spending during that period was more than £500m per month because all of the spending on restaurants, hairdressers and other services was almost entirely lost as people were confined to their homes.”

               (Nina Skero, chief executive of the CEBR)

We think an office revival is inevitable in the medium to long-term. 

Photo by Tomek Baginski.

2. Landlords are continuing to invest

Companies like CLS are “taking a long term view” and demonstrating a vote of confidence in the office market. The FTSE 250 firm recently signed a £59.7 million deal to buy three properties in Greater London and the South East, despite industry concerns around demand.

The company’s boss told the Evening Standard in September, before the new WFH announcements, that occupancy levels at its existing 35 London buildings were on the up.

CLS explained that it unconditionally exchanged contracts to acquire sites from Aviva Investors. The purchase includes offices in Richmond, Chelmsford and Leatherhead, all of which are commutable due to their proximity to train stations.

Elsewhere, multinationals are continuing to invest in their office space. In an interview with The Irish Times, Nick Leeder, Google’s head of Irish operations, explained that the tech giant is planning to balance office and remote working:

“We still believe in buildings(…)we’re going to continue to invest in space in Dublin, and we’re going to continue investing in buildings, but I think what we are looking to is the right blend of working from home and from the office in future. I think it will be more flexible.”

3. Some companies are expanding

Despite it being a challenging time for many businesses around the world, some are making the press with news of expansion plans.

Property Webmasters, for example, recently announced plans to expand with new offices in London and the Costa del Sol.

The company specialises in generating leads for estate agents, working with a range of global real estate firms such as Chestertons, Coldwell Banker, Sotheby’s and Century21.

Digital marketing manager Luke Fleming said: “We want to connect to our existing clients on a personal level much more, as well as looking to continue to grow the business and expand our international presence, these moves will enable us to do that.”

Another example is Leeds-based architectural practice PDG Architectural; the company recently completed its relocation to a new 2,000 sq ft office space in Killingbeck Office Village at Killingbeck Court on the outskirts of East Leeds, just off the A64.

4. Flexible operators are adapting

Although the coronavirus pandemic has no doubt paused the growth of the flexible workspace industry, huge opportunities lie ahead. Looking towards the future, studies have shown that workers want to work remotely around two days a week and in the office the rest. 

The appetite for agile working and the trend of dispersed and mobile teams means the demand for flexible workspace is only going to accelerate once a mass return to the office is safe and viable. Some argue that operators with a focus on ‘hybrid’ workspace (a mix of private and shared space) are more likely to weather the storm of coronavirus as they are able to facilitate social distancing better.

Most of the office operators we work with are still very much open for business and have taken measures to help limit the spread of the virus, including:

– Temperature checks upon arrival

– Enhanced cleaning 

– Contactless sign in

– Social distancing

– Hand sanitising stations

– Reconfigurations and new signage for entry/exit

Many are also offering discounts to new members/tenants, such as reduced rental periods,  day or week passes and “sign now, pay later” deals. 

A lot of operators are also enabling existing clients to leverage flexible contractual terms to help them to mitigate the financial implications of the Covid-19 pandemic. 

If you’re looking for a flexible office space now or next year, or if you’d like us to promote your flexible space on our platform, please get in touch.