There is a polarisation in office space provision, according to Jonathan Steel, Joint Head of Real Estate Occupier Solutions at BNP Paribas Real Estate.
“Flexibility and agility is key,” said Steel. “there is uncertainty around markets and the required headcount to service a business. There has been a move over the years to leasehold rather than freehold and we have seen a reduction in the average length of leaseholds. And, more recently, there has been a rapid expansion in serviced offices.
“For example, if you a big Scottish energy company with your headquarters in Glasgow, you are looking out over the next 20 to 30 years and want certainty around operations and employment, and economies of scale you would consider holding as ‘core’ and own,” he told Commercial Property.
“But if you are looking at the energy business in Europe, in terms of having sales, marketing and finance operations located there, you may want to opt for a flexible solution that can respond to any potential changes in legislation, regulation and demand.”
Technology is revolutionising how, where, and what we do at work, said Steel. More than ever, occupiers require flexibility, while investors continue to seek income security and to protect capital values. “The good news,” he said, “is that occupiers are prepared to pay a premium for space that meets their physical and technological demands and is able to flex in line with their changing business needs.”
Steel cites five key corporate trends:
FLEXIBILITY: Forward-thinking landlords are beginning to innovate and provide flexibility to tenants.
DYNAMIC SPACE: More services and spaces that blend time and place, work and private lives. These multifunctional places will be used for fun, leisure and study, according to the needs of the user.
WELLBEING: This begins with the choice of location within a city, and extends through architecture to the design of workspaces.
LOCATION: Where do employees want to work? Investors need to think carefully about what makes a compelling location, ease of
connection, leisure etc.
RESPONSIVE BUILDINGS: The drive for buildings designed to cut energy bills and reduce CO2 emissions has been turbo-charged by corporates and policy makers, and has brought big improvements.
The future may be one of cognitive and responsive buildings, equipped with artificial intelligence that enables them to learn and autonomously improve their performance.