Since the dawn of the Covid-19 pandemic, many have believed that the commercial office space was destined to die. After all, if the pandemic proved anything, it was that most businesses were fully capable of moving their operations from the office space to the home space with little to no disruption. But as the pandemic began to ease, and workplaces began to adopt the model of hybrid working, it seemed as if the appetite for office space was stronger than ever. The commercial office market was markedly more resilient than many of us anticipated.
This dichotomy between the popularity of hybrid working and home working models, and the continued strength of the commercial office space, is something that the team at Centrick Commercial have been investigating over the past few months. Our research has culminated in The Future Of The Office guide, now available to download by filling out the form at the bottom of the page.
The commercial office market remained extremely competitive at the start of 2023 and looks set to remain strong in the near future. A significant proportion of commercial office spaces currently under construction have been pre-let, demonstrating that there is strong demand for modern A-grade office spaces. What’s more, recent research on office market activity across six major UK cities revealed that grade A office vacancies were down from 6.22% in 2022 to 5.51% at the time of publication, suggesting that tenant retention and acquisition rates are improving. Leasing volumes have also been boosted over the past twelve months and it is predicted that 3,400,000 sq ft of commercial office space is currently under construction. This demonstrates that the appetite for commercial office space is on an upward trajectory, with developers eagerly planning new inner-city commercial hubs that are set to shape the future of the office.
However, office spaces that have not been modernised are currently underperforming as businesses and investors prioritise searching for commercial office spaces that are impressive enough to appeal to those who have adapted to hybrid-working methods. A generic office space simply won’t cut it in 2023, especially as employees are acutely aware that they can work from home with minimal disruption to their productivity. Office spaces must be truly outstanding to catch the eye of those browsing the commercial office market, or risk becoming a redundant and unappealing space when compared to the creature comforts of home-working that became so popular during the pandemic.
The pipeline of commercial office space that is currently in development or redevelopment stands at a huge 10.9 million square feet – a testament to the strength of demand for up-to-date, premium office spaces. These offices of the future share a few common features that we anticipate will become important trends for the years to come, namely sustainability, flexibility and the inclusion of stand-out amenities.
Sustainability is a growing trend across all sectors, but especially in the commercial property market. Many developers are promoting their upcoming commercial office units as eco-friendly business havens that are constructed using carbon neutral materials and methods. Examples of this push for sustainability can be found in abundance – just a stone’s throw from Centrick’s head offices in Birmingham sits 103 Colmore Row, a commercial skyscraper which boasts use of sustainably sourced timber, staff knowledge of Extinction Training, and high marks for Considerable Construction. Just a few yards down the road is One Centenary Way, which has proudly been constructed with green credentials in mind, and with the aim to reduce energy wastage over time, which will surely appeal to businesses looking to slice their energy bills and reduce their carbon footprint.
To attract and retain talent in a post-pandemic employment economy, many businesses are searching for commercial spaces with appealing amenities that go above and beyond what employees have available to them at home. Deloitte reports that offices across the globe are implementing everything from practical amenities such as coffee shops and lounges, to more extravagant office offerings such as golf simulators, gyms and rooftop decks in a bid to make their workplaces, and therefore their businesses, more attractive places to work at.
Expect to see an increase in multi-functional office spaces that promote agile and flexible working models. This will see the generic office space comprised of monotonous rows of desks exchanged for a more fluid space that includes more places to socialise and collaborate. This is also part of the industry’s response to the pandemic, with many office developers understanding that those who are used to working from home miss the socialisation of working in the office.
Centrick has curated a wealth of knowledge, research and information to create The Future Of The Office guide, which is available to download by filling out the form below. The guide has been created to help developers, investors, commercial tenants and office movers understand the post-pandemic status quo of the commercial office space, and what is likely to shape the market in the coming years. In the guide, you’ll uncover what the changing face of amenity space means for the modern office, the impact of the pandemic on modes of working, what commercial tenants are looking for in their next office move, and much more.
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