Confidence has returned to the central London office market in the past two quarters as demand for workspace has bounced back. Take-up is ahead of the long-term average and vacancy rates are falling.
The ‘flight to quality’ is well established, with Savills reporting that 77% of space under offer is either newly refurbished, developed or in the pipeline. We are seeing active competition for the best product and rental premiums paid for the best space in the best locations.
AstraZeneca’s move to King’s Cross has given us reason to feel optimistic. Its 37,000 sq ft UK HQ (pictured) will combine key business functions under one roof, driving in-person collaboration and innovation and putting it at the heart of London’s Knowledge Quarter, bringing it closer to partners, researchers and decision-makers.
But what is the real future of the workplace? The office as an embodiment of corporate culture is ever more important. It offers the opportunity to bring together brand, values and purpose for employees and build a sense of community internally and externally. We are remembering the importance and benefit of ‘knowledge hubs’, and know from talking to occupiers that there’s a strong appetite from employees to reconnect and collaborate in person.
People expect more from their working environment than ever before. Locations with retail, bars and restaurants, as well as culture and opportunities for learning, are more likely to thrive.
Passive enrichment – whether through exciting street art or green parks – is fundamental in attracting and retaining talent to the workplace. This sits at the heart of the King’s Cross estate and is echoed in the ethos of Brent Cross Town as a 15-minute city.
Even with the rise of enlivened places, people continue to work flexibly and dynamically. This cultural shift means companies can access a wider talent pool, ensuring greater diversity and inclusion in workplaces. Enhanced diversity results in enhanced business decision making and is a sure-fire way to avoid falling into the trap of ‘groupthink’.
Landlords and asset managers must foster a ‘challenger’ mindset, recognising the inevitability of change and capitalising on it. The ability to adapt quickly to changing market conditions is fundamental. But ‘true’ flexible working has delivered its own challenges. With legal restrictions lifted, businesses must manage their response to the pandemic on an individual basis.
These challenges aside, returning to the office is about reconnection. When in the office, I almost need to set an out-of-office response to prioritise face-to-face connection, rather than being hooked up virtually all day.
We can get by online, but some tasks thrive on human interaction. Salesforce’s Trailblazer Ranch is an extreme example; staff visit a Californian forest, disconnect from technology and form relationships in real time. Perhaps this is the future of the workplace.
Real estate has been through a seismic shift over the past two years. But where there are risks there are opportunities, and those who seize them, reject groupthink and recognise the changing needs of consumers will be the winners.
Helen Causer is office and investment lead at King’s Cross
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