As the nation moves out of lockdown again, landlords are likely to be wondering what impact this new phase of tiered restrictions will have on their portfolios. Despite a relaxation of the rules, a return to five days a week in the office still seems distant as some form of work from home guidance looks set to remain in place for winter. What will all this mean for vacancy rates and leasing?
It’s a truism that the world of work has changed. Flexible working in whatever form appears to be here to stay, and businesses will be reassessing their need for desk space and considering how best they can meet the new expectations of employees. In this context, less rigid rental agreements, that allow for scaling up or down of commitments, shorter terms and smaller upfront move-in costs will be important.
On the face of it, the ‘WeWork’ style office space is well placed to capitalise on this trend – with flexible leases and plug and play offers that enable tenants to move in quickly with minimum hassle.
This doesn’t mean that landlords of more traditional workplaces can’t compete, but to do so, they’ll need to embrace a shift in mindset and invest in assets to make them more attractive to prospective tenants. There are lots of factors at play, but one aspect that should absolutely not be overlooked is internet connectivity.
Let’s deal with the competition first. A smarter approach to connectivity can help landlords match the flexibility and easier moving experience associated with serviced offices. Internet infrastructure takes on average three months to install, which can mean losing out to serviced offerings if tenants are unwilling to wait. By pre-installing infrastructure with the office fit out, however, traditional office spaces can avoid these lengthy waiting times. Clever use of Wi-Fi can also form part of flexible contract arrangements – for example by allowing different employees to share desks on different days, with access restricted to nominated users depending on the day of the week.
So, landlords can meet the challenge set by serviced providers, but how can they do more and go one better? Crucially, they must demonstrate to occupiers that they understand their business challenges.
First, there is the changing priorities of employees to contend with. The pandemic has kickstarted a work from anywhere culture – with workers now expecting to be able to dial in from home, a café, a co-working space or even abroad. The internet infrastructure in office buildings needs to be robust enough to support this.
Landlords must also demonstrate how they can help businesses unlock best value from their workplaces – in particular supporting team cohesion and enabling collaboration, creativity and collective ideas sharing. A good internet connection is vital to support all of this.
Commercial landlords and tenants alike are treading new ground this year. As the future of traditional workspaces looks uncertain, landlords can future-proof their assets by closely anticipating their tenants’ needs and supporting the transition to flexible working. Investing in the technology that underpins this is a crucial way to reduce risk and make sure office space is fit for the post-Covid landscape.
Dave McLeod, co-founder, Backbone Connect