55% of UK Office Workers Favour Hybrid Working, Will the Office Ever Be the Same?

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woman working at a desk with flowers and laptop on itIn May 2022, we conducted a poll of 450 office workers across the UK to determine their true working preferences. This poll was designed to inform us on a number of concepts related to the post-pandemic UK working landscape, with hybrid and various other working models receiving particular attention.

The most obvious and glaring takeaway from our poll was that more than half of respondents believe hybrid to be their ideal working arrangement. Prior to conducting this poll, we ensured that respondents were limited to individuals who had worked in an office environment prior to the pandemic, a group that we believe to be the most indicative of changing sentiments around in-person, remote, and hybrid working models. We posed many questions to these respondents regarding their pre-pandemic and post-pandemic working situations, as well as the ways in which their working preferences changed since the start of 2020. Results from related questions were seen to be in line with the 55% majority that indicated their preference for hybrid working arrangements for workers returning to the office.

To summarise relevant findings, this poll illustrated that (rounded to the nearest whole number):

  • 55% of UK office workers see the hybrid model as their ideal working arrangement
  • 20% of respondents indicated a preference for full-time remote work, highlighting that a sizeable number of UK office workers have no desire to return to their former office spaces
  • On the other hand, 15% of workers polled believe that it’s ideal to return to the office full-time. A number which, despite being lower than the desire for full-time remote work, clearly illustrates support for more traditional working models
  • The clear minority (10%) of those polled preferred to return to work in a part-time capacity. Of those who desired part-time work, there was a slight preference for purely remote (56%) when compared to purely in-person (44%) schedules

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Can You Spot the Odd One Out in 5 Seconds? – London Umbrella Brainteaser

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london brainteaser at London Office Space

 

Can you spot the red umbrella in less than 5 seconds? There is only one red umbrella hidden within this sea of famous London icons – can you find it?

With the month of April forecast to bring a heatwave to the UK this year, we’ve created a fun April showers brainteaser to remind you all that the rain will be back again soon. Continue reading “Can You Spot the Odd One Out in 5 Seconds? – London Umbrella Brainteaser” →

London Office Market Sees Highest Level of Occupier Activity since Before the Pandemic

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Recent research undertaken by Knight Frank illustrated increased uptake in the London office space market throughout Q3 2021. The 55% increase in leasing transactions of 2.63 million sq ft leased in Q3 of 2021 demonstrates the highest quarterly increase recorded since 2009. Additional research carried out by Gerald Eve outlined a 30% increase in uptake to 2.8 million sq ft when compared to the previous quarter, something that they attribute to large commitments for space made by major occupants. Knight Frank’s research highlighted the importance of these major space commitments, with 42.4% of all transactions in Q3 being for spaces of 100,000 sq ft or more. To further support this growth in market activity, a report published by the Royal Institution of Chartered Surveyors (RICS) showed that demand for the London commercial market grew at the fastest rate since 2016 between Q1 and Q2. Despite the pandemic bringing world economies to a near standstill, the London office market has bounced back strongly to witness the second consecutive quarter of increased demand. Here are some of the factors that influenced these high occupancy levels.

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East London Office Space Rental Costs & Vacancy Rates 2021

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East London offices are home to a diverse mix of tenants, involved in sectors ranging from industry to manufacturing, technology, banking, and finance. Office-based businesses are attracted to this area due to its competitive rental rates and access to local talent.

2021 started off in East London with average prime rents of £45 per square foot. Rates for tenant controlled space were slightly lower at £42 per square foot. Asking rents were one of the few indicators that remained stable along with incentives, which currently amount to 30 months rent-free for office leases of 10 years or more.

Although rental rates experienced little changes during Q2 2021, they’re expected to decline by 10-15% by 2022, a figure substantially higher than in other London sub-markets.

As for vacancy rates in East London, they spiked to nearly 12% during the first three months of the year. Although this number is high, it’s still lower than the record-figure of 13.8% reached in 2020.

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South London Office Space Rental Costs & Vacancy Rates 2021

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The South London office market has followed a slightly different trajectory to other parts of London, as it began to be developed later than other areas. Defined office space clusters in South London are relatively new, and the vast majority are located in or around the SE1 postcode. This area has a strong appeal for office-based companies involved in media and creative sectors, and has a positive balance between supply and demand.

However, South London hasn’t escaped the effects of pandemic-related restrictions. Overall office availability has increased by 20% in just one year, although top-quality offices are still holding their value. The same can be said about rent-free periods, which stand at 24 months for office leases of 10 years or more. At the time of writing, overall rental rates for Grade A offices in South London are in the mid £70s per square foot. Office units of 5,000 square feet and above may experience a rental decline between 7.5% and 12.5% by the end of Q2 2022.

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London City Fringe Office Space Rental Costs & Vacancy Rates 2021

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London Fringe markets have a diverse occupier profile, from startups in the media and creative sectors in eastern areas like Hackney, to established tech firms in and around the Old Street roundabout. Until recently, commercial property in this area was in very high demand from both newcomers to the city and companies who relocated from other parts of London.

Although demand for offices in the City Fringe is still there, Brexit and pandemic-related uncertainty has put a damper on the area’s growth trajectory. In this area, overall vacancy rates have increased from under 6% to over 9% in the past year, and availability for the City Fringe sub-market is just under 12%.

The following is an area-by-area update on the state of City Fringe offices during 2021:

Clerkenwell

Clerkenwell is part of London’s Tech Belt and has a strong presence of office-based businesses primarily involved in design, architecture, media, and technology.

This sub-market started 2021 with signs of improvement in take up activity, however, take up levels are still more than 50% below the area’s ten-year average. Prime office headline rents average £75 per square foot, rising to over £110 once business rates are added.

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West London Office Space Rental Costs & Vacancy Rates 2021

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The West End is one of London’s prime areas for commercial real estate. This market has also been one of the most severely affected due to pandemic-related restrictions, which were felt sharply in addition to the uncertainty created by Brexit.

At the start of 2021, the general situation in the West End was marked by a 91% increase in availability compared to the previous year’s figures. More than 7 million square feet of office space were available in Q1 2021. Vacancy rates for the whole of West London were estimated at just over 8% in early 2021, which is double the rate of the Q1 2020 figure.

Both factors combined led to a slight decrease in prime headline rents, which were calculated at an average of £110 per square foot in Q1 2021. The downward trend in rental values is expected to continue into 2022 with a rent decline forecast between 7.5% and 12.5%.

The majority of deals that recently took place in this market came from the professional services sector and involved small offices of 5,000 sq ft and under. On the whole, occupiers still hesitate to commit to large spaces and/or long leases.

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City of London Office Space Rental Costs & Vacancy Rates 2021

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2021 started off with gloomy forecasts for the London commercial property market. According to market analysts, the outlook for the first half of the year was to be dominated by soaring vacancy rates, which were expected to reach a 10-year-high.

In Central London, changes to vacancy and supply rates have certainly been a constant for the past few quarters. In this part of the city, increasing vacancy rates have been mainly driven by the release of large amounts of secondary and Grade B space.

Earlier in the year, vacancy rates in the City were slightly over 10%, but supply was still rising, so they were expected to continue increasing. However, the second quarter arrived with a decline in vacancies, which ended up averaging 8.7% across the City. Despite the improvement, at more than 6.5 million square feet, these are the highest availability rates since mid-2012.

The second quarter of the year also brought some improvement in office take up rates. While these are still significantly below the ten-year average, there was a quarterly increase of over 20% across central London.

However, demand remains rather weak and take up for Central London offices is largely down when compared to 2020 figures. Although demand is weaker, it is still there with an increased focus on quality office space, whether it is new, refitted, or retrofitted to a high standard. The majority of demand so far has come from the public sector, professional services, insurance, and financial services companies.

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Overview of The London Commercial Property Market Q2 2021

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2021 started at a sluggish pace for the London commercial property market. During the second quarter of the year, the market evidenced signs of recovery. Office, retail, and industrial markets registered an uptick in activity starting in April.

The main themes observed this quarter were:

  • A strong appetite for high-quality office and industrial space.
  • Growing investment volumes.
  • Vacancy rates kept increasing, but they’re still lower than expected.

Office Market

The London office market started to show signs of recovery during the second quarter of the year. Investment volume totalled more than £2.5bn, confirming the renewed confidence of investors in the future performance of the city’s office market.

Transaction levels were up, with most transactions involving Grade A space, sub-lets and dominated by the creative, technology sectors, non-profit and public sectors. Large transactions centred around the EC2 and SE1 postcodes.

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How to Deal with the Stress of Returning to the Office after a Long Layoff

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Over one year after wide-scale remote work was implemented across the UK, approximately 60% of the workforce is still working from home in either a full or part time capacity. As plans to lift all lockdown restrictions get closer, many businesses are preparing to go back to the office. However, after months working remotely, many employees and business owners are finding that the return to work can be both exciting and stressful.

Research undertaken in economies that have already returned to office-based work shows that anxiety and stress are both common reactions among office workers in the post-COVID era. In this article we’ll look at how to manage these feelings and make the return to the office as pleasant as possible. Continue reading “How to Deal with the Stress of Returning to the Office after a Long Layoff” →