Yet the pandemic has also brought the positives of remote working to our attention, bringing to the fore the concept of hybrid working which many businesses are now keen to adopt. With many businesses now reviewing their return to work strategy, office landlords now arguably face the biggest challenge since the pandemic - finding ways to capture the attention of businesses and getting them to choose their spaces.
Office leasing is now harder than it once was. Businesses know they can survive without an office so, in order to return, they have a new set of requirements. Recent research shows that over half of UK businesses saw their real estate strategy include a greater amount of flexibility. Over two-thirds said the design and specification of their offices will play an important role.
With further research showing that the majority of new office starts are actually refurbishments, it’s evident that businesses are keen to change the traditional office set up and make it their own. It is these changing demands that landlords need to be mindful of if they wish to successfully acquire tenants and avoid prospective clients turning elsewhere.
We have also seen these changing demands at Kitt. Our data has shown that the West End, Southbank and the City Fringe are now the most sought after locations. This is compared to the same period last year, where the majority of enquiries were outside of Central London in West London and City East suburbs - where employees looked to lessen their commute, finding locations closer to home.
Over the past six months, we’ve also seen six times more requests for outside space and an increase in requests for amenities such as bike racks and showers, showing us that businesses are aware of how their space needs to work for them and are actively matching the facilities to what their teams have become accustomed to when working from home.
It’s all very well to say that landlords need to listen to what tenants want and see anecdotally what they request. However, it is only when you really analyse the data of usage and demand that you can get to grips with exact tenant requirements. Landlords need to think like business owners rather than simply asset owners - the asset can no longer just sit and provide an income. Landlords have to use data and be more entrepreneurial, offering a fantastic tenant experience through end-to-end solutions to attract the best tenants.
The data allows landlords to spot when trends are developing and forecast whether it is a short term change or long term transition, providing an immediate solution to leasing - for example, landlords can understand how to present their spaces through flexible leases and increased collaboration spaces. However, the data can also be used to determine long-term strategy. Landlords can understand demand and shape the way they operate to ensure customer loyalty, retention and guaranteed success to acquire new tenants.
Despite the fact landlords need to work harder to get businesses back in the office, the good news is that the demand for office space from investors hasn’t waned. In fact, in London alone, investors targeted London’s office investment market in 2021 with £46bn of capital. As the office will continue to be a permanent feature in people’s working lives, landlords need to make it a place where people want to be, and can only do so if they pay attention to the data and act on it.
