The new head of national office agency at Savills is preparing for a busy year ahead as corporate occupiers “grasp the nettle” and push ahead with their post-pandemic workplace strategies.
James Evans was named as the firm’s national office agency lead this week, taking the role from Jon Gardiner, who was named head of central London office leasing. Evans will continue to lead the Manchester office in his new post.
Evans told EG that “latent demand” for office space across the regions is set to come through as companies finally push the button on relocation plans they have mooted during two years of the Covid-19 pandemic.
“The last 12 months saw a lack of clarity from a lot of occupiers,” he said. “There were lots of people we spoke to who have a lease event, decided to relocate for whatever reason but just weren’t in a position to nail down exactly what that looked like. ‘Do we need 50,000 sq ft or 35,000 sq ft? What does agile working look like and how does it translate to a square footage?’”
He added: “There’s still more to play on that – we are still seeing some occupiers kick the can down the road. But we are also seeing a greater number of those in a position to make a decision say, ‘We need to grasp the nettle, nail down what our requirement looks like, get out there and secure a new, quality office.’”
Companies are likelier to be pickier than ever about the space they take. Environmental, social and governance issues have rarely been higher on business agendas, and Evans said Savills is seeing “significantly more businesses challenge our landlord clients around the sustainability aspects of their buildings”.
Much of the current activity was centred on the highest-quality sites, Evans added, given a growing acceptance of the office as a tool for attracting – and keeping – talent.
“Most businesses that were in a position to make a decision and relocate accepted the fact they needed to go up the quality chain,” he said.
“They now clearly see a direct correlation between having a very high-quality office, the productivity of the people they employ, and their ability to get those people back into an office. And across all the regional markets, those occupiers that did commit to space were prepared to pay more rent to get into better buildings.”
Evans expects rents to continue their rise, not least because almost all the big regional cities saw rents increase last year “despite the very challenging times”.
“People are saying, ‘We may need 10% less space but we are prepared to pay the same total cost to ensure we secure the best space’,” he said. “I think rental growth is going to keep going, partly because of that demand-pull inflation – people fighting for the best space – but also cost-push inflation, which is going to have to come through in rents.”
To send feedback, e-mail tim.burke@eg.co.uk or tweet @_tim_burke or @EGPropertyNews
