What do commercial occupiers want from the London market?

Monday 6 October 2014

Office occupiers want flexible, attractive buildings that encourage workers to mix and enjoy a series of different working environments. But they are more fussed about what their building says about them in terms of placemaking and the live/work ‘blend’ than they are even about their wages.

Those were some of the key messages to arise from a well-attended conference at the NLA on 30 September which sought to determine exactly what commercial occupiers want from the London market.

David Shaw, Head of Regent Street Portfolio, The Crown Estate kicked off, noting that in an environment of ‘incredibly strong’ office take-up in central London, lease lengths would inevitably drop further from the 20 years of the past to eight today. But being customer-focused is more than a ‘nice to have’, he said, and office developers had quite a long way to go before brands are cherished as much as, say Apple. Staff retention is critical, said Shaw, as is power and diversity of electricity supply – not just regarding the amount of power but in dual sourcing in any building. Flexibility is another key consideration, there is a flight to quality, and, added Shaw, image is something that starts in the reception.

Dan Bayley, Head of central London leasing, BNP Paribas Real Estate, said London’s main office areas were changing rapidly, as epitomised by the South Bank, whose profile has changed markedly. It has moved from its initial tranche of bankers, accountants and lawyers to seeing News UK, Al Jazeera, and Ogilvy & Mather all moving to Southbank from other parts of London, the latter of which moved out of Canary Wharf – ‘definitely the wrong place for their business’. The TMT and serviced office sectors will be key growth areas, while tall buildings in future should perhaps embrace mixed use more fully, suggested Bayley.

The nature of work, though, has itself changed. Nicola Gillen, Director - Strategy+, AECOM, said digitization and mobility of work had had major impacts on where and when we work. ‘All of us work for technology firms now’, she said. But in compiling 25 years of data on how buildings are actually occupied, AECOM has found that workers spend 42% of their time at their desks, compared to 73% occupancy in West End Theatre seats and 86% in hospital beds. Spaces allocated and owned by individuals represented a ‘fundamental mistake’. ‘Work has definitely left the building, and that is a good thing for people’, said Gillen. To an extent, the office is the city, but empty office buildings should be repurposed, with mixed use, soft boundaries allowing for more meaningful human connection.

One person trying a different approach is Charlie Green, whose Office Group provides design-led flexible working space in 21 buildings, mainly for creatives who benefit from events, networking and mentoring as well as space. ‘The office is changing because we’re now entering into a truly sharing culture’, he said. For Argent partner Nick Searl, moreover, it has been all about defining a place and creating a new piece of city at King’s Cross, far more than it has been about any one individual building. This starts with transportation, with King’s Cross having been blessed by the £2.5bn spent on upgrades contributing to a key change in the area’s perception. But it is also about accessibility at the other end of the scale, at a personal level – people running along the towpaths or, as is growing inexorably in popularity, cycling to work. ‘I haven’t been asked about a car parking space for five years’, said Searl. King’s Cross was helped immensely by ‘a great heritage story’, but was enhanced by the creation of public space across 40 per cent of the site, managed and curated correctly as a new destination, and aided, importantly by favourable reviews from journalists and bloggers. Argent will be spending £1m a day over the next four years on construction, said Searl, but perhaps the biggest single attractor for office occupiers was an unexpected one – the University of the Arts.

The conference also heard from speakers including Lend Lease head of offices Kevin Chapman, who spoke of the lessons learned from King’s Cross and taken to Stratford’s The International Quarter, which it is branding as ‘London’s feelgood workplace’. Chapman stressed the need for good sightlines across floorplates to aid movement, a healthy workplace and communication. ‘Ultimately the workplace is the best expression of corporate values a brand has got’. Real Estate Management leasing director James Goldsmith detailed some of the assets his firm is handling for the State of Qatar such as the Shard, commenting that the competition for people is intense, not just in recruitment but in retention. ‘If there is a battle for talent going on then I’d say that workspace is now the battleground’, he said. Pringle Brandon Perkins+Will managing principal Chris Brandon said more and more buildings are being fitted out with no ceilings and that there is a need to create more opportunities for people to meet. Sheppard Robson’s Helen Berresford detailed the lessons she learned on the Channel Four fit-out in Victoria where the challenge laid down by the client was to void being ‘gimmicky’. Gensler’s Philip Tidd suggested ‘we are on the cusp of a complete reinvention of this thing we call an office’ amidst a ‘sharing generation’; and Philip Turner of AHMM showed how schemes such as Google’s HQ in King’s Cross are demanding more in the way of promenades and ‘positive friction’. Finally, AECOM’s head of interiors UK and Ireland Jason Stubbs said sustainability was also a key consideration, having saved 10% on one recent project for Heinz through reevaluating principles.

David Taylor, Editor, New London Quarterly

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What do commercial occupiers want from the London market?


This NLA half-day conference will bring together key developers, occupiers, architects and agents to examine the future of London’s workplace and exactly what it is that the occupier of tomorrow wants and needs.