As London returns to its pre-pandemic bustle, under the surface lies a changed city. The experience of the past 18 months, and the increasing importance of sustainability and work-life balance, has led to a fundamental rethinking of the office and workspaces more generally.
Or has it?
EG gathered three leaders from across the market to find out more about what the role of the office really is, what is most important to occupiers and how technology and collaboration can ensure that London remains a resilient city.
For Matt Flood, head of occupier markets at Landsec, the occupational market has been “permanently disrupted” by Covid, which he says is an opportunity for property owners and developers such as Landsec to do more and offer more.
“I think it’s permanent because it is underpinned by shifts in fundamental demographics and human behaviour,” says Flood. “We had something similar in retail, where you saw the rise of e-commerce and how that fundamentally changed the business model and the physical role of retail space. There are certainly some learnings we can take there into the office sector and recognise that this is a change in how people consume, use and want to partner on office space. And I don’t think we are going to go back to how things were.”
For James Shannon, chief product and technology officer at Essensys, and Mark Shepherd, a partner at law firm DWF, that permanent change has been a shift towards more flexibility and agility and a greater use of technology.
“We’re not just talk about the ability to deliver a flexible office,” says Shannon, “but flexible commercial terms, flexible buildings, a flexible landlord, the ability to react to a changing market. It is a permanent change, but none of us can predict exactly how it is going to play out. The ability to be agile and to react to market demands and customer demands is where technology plays a part.”
“It’s all about how we can make things work for the people,” adds Shepherd. “A lot of it is employees and what they need, rather than the employers and what they want to have their workers do. And it’s going to become more and more an occupier in the sense of a body on a seat-led demand rather than an occupier in the sense of a company employing people and leasing space demand.”
Flood says that shift from employer to employee when it comes to occupiers and their needs is crucial for property owners to understand.
“It’s crucial now to recognise how we need to listen more, make that switch to a customer mindset, rather than a landlord and tenant, and genuinely position ourselves as partners rather than an arm’s-length transaction,” he says. “We need to move from very much a one-off deal to a far more technology-type language where you’re offering solutions and partnerships over the longer term which can evolve and flex.”
He adds: “In an ideal world, your footprint can move with your business, whereas before you were having to make a static decision about your footprint and your business evolves around that.”
The panel
- James Shannon, chief product and technology officer, Essensys
- Matt Flood, head of occupier markets, Landsec,
- Mark Shepherd, partner, DWF
For Flood, the big change will be in relation to how property owners can deliver a service that is more responsive and customer-focused.
“I think that it is crucial for our industry to be driven by the customer rather than necessarily the investment value market,” he says. “And I think that probably needs a slight rebalancing in terms of what’s driving decisions.”
Shannon agrees, adding that the same sort of flexible thinking will be required for technological solutions to the permanent disruption of the occupier world.
“This flexibility goes beyond just a solution from a technology platform perspective. It’s the ability for each customer or each flex operator, whomever the actor might be, to be able to offer their customers the ability to configure and tailor the environment to be a productive environment for their particular company and their particular staff as they figure out how they’re going to navigate their way through this new normal.”
And it is understanding the nature of that navigation and helping to steer the way where real estate should be able to play a role.
“I love the analogy where the office space and what we provide as the building is a stage and you refocus on the fundamentals of volume, light, fresh air, etc and then the occupier can come in and change the set as they need over time,” says Flood.
“I think that’s the physical flexibility, then the commercial flexibility comes through lease flexibility and different products. I think it’s trying to combine physical and commercial flexibility. That means you will then be able to convince people to make those long-term investments, because there will still be people wanting to make those statements and secure a long-term HQ that reflects their brand and their talent agenda. They just need to address the flexibility in a different way and have the means to do that.”
Fundamental factors
All three were confident that an office, a space to collaborate and innovate, would remain a fundamental for occupiers.
“I think unquestionably the office is the place, the headquarters of the function of any business,” says Shepherd. “The underlying professionalism [of any business] is created and engendered by having office space that people can go to and collaborate and just have as a unity and as a place to base themselves.”
He adds: “The end result is inevitably going to be employers acknowledging that the productivity is equal or better by having people in the office, and as long as people are still coming in, allowing them to be at home as well, allowing them to be flexible with their daily needs. Employers have to be flexible. They have to have space that allows flexibility in the collaborative work, which is both face-to-face and for somebody who happens to be working from home that day.”
“The places that are going to thrive,” says Landsec’s Flood, “are places, buildings or spaces that offer and enable choice on a business and personal level. That is going to be key because people are going to want more autonomy. Those places that can really provide a compelling experience and enable choice, those will be the ones that will really thrive.”
Shannon agrees. “There’s no one answer for the future,” he says. “It’s all about being able to offer customers flexibility, the ability to react to the market, react to demands they know the market is putting on them and react to the next possible pandemic.”
To send feedback, e-mail samantha.mcclary@eg.co.uk or tweet @samanthamcclary or @EGPropertyNews
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