Landlord offering - The Great Office Occupier & Developer Debate
19 May 2022
The requirements of organisations returning to the workplace in a post pandemic scenario have undoubtedly been influenced by the learnings we have all experienced during the pandemic. As these business requirements continue to go through a state of flux, occupiers will be looking to their landlords to match the changes in demand.
Will we start to see space being offered more like a hotel or retail space to match expectation and need? Workspaces should become more dynamic and capable of being reconfigured quickly to suit an occupier’s changing needs. This may be more of a ‘stage-setting’, whereby the evolving work-settings require changes of scenery and props. Speed and agility in effecting changes will be all important success factors.
Recent and current opinion polls among staff suggest that the majority would favour a 2/3 or 3/2 day working from home working week going forward. There is also a view, substantiated by many employers, that attendance will be important for cohesion and collaboration across the workforce. This may then necessitate a gravitational pull in order to entice workers back into the office. In this case the office needs to offer more than remote working can do. Choice of work setting, social balance, strong sense of community and team engagement will contribute to success in this area.
Social and leisure features will undoubtedly contribute to the appeal of the office. Before lockdown, we had started to see trends such as a focus on the food and coffee offering available. This is particularly important for campus settings where the external amenities may not be available. Meetings may become more like client lunches, with the restaurant/coffee shop in a building becoming more of a destination to meet and collaborate. Gym spaces, exercise classes - and the permission to use them - will also underpin appeal and connection between the employer and employee.
Changes in the range and pace of technology and the continued evolution of smarter buildings will drive the need for more data to be captured on different devices. This should be used to analyse the space and learn about how buildings are being used and how their use can be refined. ‘Data savvy’ landlords may well hold an advantage, as they will use data to better understand what occupiers want and need and enhance their offering as a result.
Whilst there is no guaranteed recipe for success, we would expect the following to be central:
- a super-green building aligned with occupiers sustainability policies;
- carefully curated services to match occupier staff needs; and
- a tech layer over the top that seamlessly brings everything together.
Things for occupiers to think about:For occupiers, there are benefits in building strategies that encourage their staff and business models to thrive and progress. If companies scrimp and save to occupy sub-standard space, it is likely that they will lose talent: the impact on top line is greater than bottom line. While staff costs continue to outweigh the cost of premises at least eight-fold on the balance sheet, this will drive occupiers to seek more from their landlords.
Things for developers and landlords to think about:The key lesson landlords need to learn, is that there will inevitably be a step change in demand: The working models of the past are no longer good enough, and there’s an opportunity to rebuild the system to be better than what was done before COVID-19 - landlords must be ready to engage in the language of the future workplace.
Conclusions - The Great Office Occupier & Developer Debate27 May 2022
In 2021, Lewis Silkin and HCG hosted three separate panel sessions where the views from senior members of the Occupier and Landlord communities were heard on a range of key, current topical issues within the real estate industry.
Location, context and place-shaping challenge - The Great Office Occupier & Developer Debate24 May 2022
Office premises come in a wide variety of forms from new, smart buildings to older traditional and historic stock. One thing that is common to both is the need for context and location – a sense of physical place.
Technology Integration challenge - The Great Office Occupier & Developer Debate19 May 2022
There is no doubt that technology has been the fastest evolving element we have seen in offices. Remote working forced a switch to the use of virtual technologies for staff and organisations alike. IT departments had to respond to the challenge in order to keep business running and to bridge the gap between commercial and domestic data networks.
Lease Flexibility - The Great Office Occupier & Developer Debate11 May 2022
The concept of ‘flexibility’ from a leasehold perspective can take many forms and within that there are degrees and differing perspectives. The coming years will see more flexibility within leases and/or licences and perhaps new arrangements that have yet to come to light. The future is unclear, but that will, inevitably, create opportunities and encourage change.
The Sustainability and Net Zero Challenge – The Great Office Occupier & Developer Debate11 May 2022
The lockdown months saw a huge reduction in the operational carbon footprints from commercial workplace premises. The lack of the daily commute for millions of workers also contributed to improvements in urban air quality and energy consumption.
Wellbeing and human centric workspace challenge – The Great Office Occupier & Developer Debate11 May 2022
Wellbeing is a difficult concept to pin down: it is both physical and intangible, practical and esoteric, and so can be tricky to measure with any accuracy. That said, the disruption from COVID-19 has provided an opportunity to create better, more human-centric workspaces.
RE: VISITED - The Great Office Occupier/Developer Debate
In 2021, Lewis Silkin and HCG hosted three separate panel sessions where the views from senior members of the Occupier and Landlord communities were heard on a range of key, current topical issues within the real estate industry. This follow on-series brings together some of the key themes from those sessions in relation to ‘The Great Office Occupier/Developer Debate’ as we reflect on the past year, merging the best of the old ways of doing business with the best of what was learnt during the pandemic.