COMMENT For most of the present century, the colossal glow of the HSBC logo has cast its 200m-tall light across Canary Wharf and the Thames beyond.
Now, however, the bank has announced its intentions to swap this base for a new home in St Paul’s – part of the company’s global plan to downsize its office space by 40%.
What this move does not signify is a decline in London’s office market. Far from eliminating the need for offices, our new way of working demands a new type of workspace. For some businesses, the rapid increase in homeworking brings with it an opportunity to cut down on costs associated with office space.
Departures from centres like Canary Wharf reflect a shift in London’s business life away from traditional, large-scale offices, and towards smaller, serviced spaces.
Indeed, while the amount of empty office space in the UK is at a nine-year high, more than two-thirds of London’s flexible offices are over 80% occupied: a tale of two cities which proves the ongoing resilience of the city’s office market.
Moreover, while London enjoys 75% of the UK’s flexible office space, cities across Britain have witnessed rising occupancy levels, with Cardiff, Edinburgh, Manchester and Birmingham amongst the other key flexspace centres.
Less is more
The future is flexible and so are its offices. In the tug-of-war between employees calling for hybrid and businesses eager for in-person working, a hybrid model has proven the clear compromise, with 28% of UK employees working on a hybrid basis and an additional 16% worked exclusively from home.
Moreover, at a time when almost two-thirds of office workers would turn down a position which did not offer flexibility, businesses that reject the hybrid way of working disadvantage themselves when it comes to recruitment and talent acquisition.
With hybrid here to stay, businesses are faced with new challenges and decisions around what to do with existing offices. For many companies, large-scale offices with high overheads are no longer cost-effective, as desks remain empty and meeting rooms go unused.
Benefits of flexible space
Serviced, flexible offices have a double benefit here: they accommodate a reduction in employee footfall and simultaneously help to reverse this decline by enticing workers back to the office.
By providing smaller-scale office spaces, pay-as-you-go meeting rooms and breakout spaces suitable for both online and in-person collaboration, flexible office providers can help businesses to retain an office set-up without paying unnecessary overheads.
At the same time, services such as on-site bars, gym facilities, and GPs work to draw employees back to the office by creating an environment that earns the commute.
For businesses like HSBC, such flexible office spaces provide an obvious next home at a time when hybrid rules.
A shift from the Wharf
Notorious for its larger-than-life buildings and looming office towers, for many years Canary Wharf acted as the perfect base for global giants such as HSBC.
With businesses looking to downsize their floorspace and bolster the number of workers attending, however, areas such as St Paul’s have begun to gather appeal.
Again, we return to the problem of attracting workers back to the office. When work can be done from home – or indeed anywhere – employees now expect more than just a job at the other end of their commute.
Coffee shops, pubs, bars, and a culturally vibrant, architecturally beautiful area all provide incentives to pull workers back into the office; all of which is found in St Paul’s.
Lying that bit further out from the centre, however, Canary Wharf fails to hold the same appeal.
Moreover, as a nucleus for five of the eleven underground lines, the Square Mile offers easy access to the entirety of London, making it the ideal point to begin the night out or commute home.
The age of the office is far from over for London: we need not fear an end to water-cooler small talk or the hustle and bustle of the morning commute.
That being said, the flow of companies away from traditional office spaces underlines an important shift.
Far from obsolete, the office market finds itself at a time of change, where dynamic office providers can profit from the new demands of employers and employees.
As changes in how we work begin to change where we work, London is set to witness a significant shift in its built environment over the coming months and years.
Niki Fuchs is chief executive of Office Space in Town
