London’s future workplaces will need to be designed to win the race for younger talent, with higher densities allowing for other ‘workstyle’ facilities aimed at increasing staff wellbeing – but also their productivity.
And although permitted development rights and economic conditions are hitting office provision hard in favour of residential, the right balance must be struck between protecting and encouraging, and the system of use classes is holding the world of workplace back.
Those were some of the key sentiments to arise from a wide-ranging working group discussion at NLA aimed at informing the themes for its next Insight Study, which launches in Autumn.
Rob Harris, Principal of Ramidus Consulting Limited said things in this area are changing rapidly, with key themes emerging around agility – at an individual and corporate level; choice – people expressing choice in ways they were not able to before; connectivity – in technology and supply chain activities; and finally, experience – with staff demanding more from their workplaces. Permitted development rights changes represented an enormous threat, said Harris, with commercial activities virtually disappearing in boroughs like Islington.
Diversity and innovation were also important drivers, said Head of Office Development at Lendlease Kevin Chapman, with the goal being to create environments where people can innovate. ‘Without that, a lot of businesses just won’t keep up’, he said.
But although a lot has been said about affordability, said Digby Flower, Chair (UK & Ireland) and Head of London Markets at Cushman and Wakefield, in fact rents have barely doubled over the last 30 years, in comparison to graduate salaries, which have risen ten fold, and housing costs, which have also steeply climbed. Bankers are reducing their space take, with only the client-facing elements remaining, while lawyers moving 10-15 years ago would take a third more space and are now taking a third less. But the war for talent is most keen in the tech sector, with staff preferring the locational draw of a Shoreditch or a Spitalfields rather than a Swindon. To continue to attract the digital generation, developers need to build much more flexible space going forward, said Flower.
For Derwent’s Development Manager Benjamin Lesser the goal is to find the next vibrant spot, but the war for talent can be applied to all sectors, not just tech. Enterprises such as Olly Olsen’s The Office Group have found a niche, providing well-designed flexible space for small companies which are keen to collaborate, with communal areas and a co-working strategy that allows them to sell desk space 2.5 times over. But where once smaller companies wanted to be near big ones that situation has ‘flipped on its head’, with bigger firms seeing value in proximity to smaller.
“Industrial space is a worry”, said Levent Kerimol, Principal Regeneration Officer at Greater London Authority. “We are losing industrial land at almost thee times the sustainable rate set out in the London Plan”, he said, “without their vital role, we risk stifling the wider London economy”.
And yet, said Strategic Planning Manager at Greater London Authority, Colin Wilson, the GLA is aiming to move away from drawing ‘red lines’ around areas in favour of knocking on doors to get a sense of what people are making and doing in industrial places. ‘It can do a lot of harm by defaulting to ‘ooh, we’re going to protect things. In a city that is going to 10-11 million we need to be better at looking at what we’re protecting and why. We’re trying to get away from the big statistics thing.’
Small industrial outfits do need some kind of intervention, though, said Carl Welham, Interim Head of Regeneration Delivery, LB Hackney, or they will leave for Brighton or Lisbon, not just outer London. Locations can change, however. Head of Leasing at British Land, James Danby said that Regents Place was a good example, having not been on agents’ radars but is now accepted as part of the West End. The company’s project in Canada Water is a similar idea, based on a ‘campus’ model of placemaking. The Shoreditch and Clerkenwell success has actually been to do with the urban grain, suggested Danby. The cluster is also important, said Lisa Sharp, Manager, Regeneration, Economic Development & Environment, London Borough of Hounslow, with the Golden Mile from Gillett Corner to Chiswick attracting a lot of activity from tech and emerging creative industries. And Annette Simpson, Head of Planning, CAPCO said in Earls Court the developer is subsidizing small businesses in order to create a more ‘vibrant’ place, that ultimately adds value.
But the Use Classes system, set out in 1948, is ‘stymying’ developers who wish to respond to changes in the way we work, live and travel, said Benjamin Lesser. ‘We’re being held back’, he said. ‘Let’s mix it up. And we need partnership with local authorities to curate this.’
A confidential client of Jack Pringle is adopting this mixed use approach focused on the making culture, with their desire to produce a site with offices, research, prototype making, some manufacturing and residential for its staff, a little like a latter-day Rowntree. But more broadly, said Pringle, there has been a sea-change since recession in how buildings are built, partly because of the ‘agile agenda’ that is now completely accepted by everybody apart from lawyers. Owners want to use their space more intensively, with one major consequence being twice as many people in them than a generation ago. ‘We’re seeing lifts failing all across London’, said Pringle. ‘The old stock just can’t cope’. Big businesses realize that they are all digital companies fighting to attract people who don’t want to work in their large corporate offices. Many are having offshore separate offices in response. The urban realm is also becoming more important with the city ‘becoming’ the office, but in this respect the City of London in particular lags behind continental cities.
Make partner, John Prevc, said that work has become more a place of research than production, and that biophilia is another important aspect in the workplace of today. In Hungary in particular, where Make is designing a project, Prevc said there was a great deal of interest in being associated with ‘green’. In the States, moreover, he reported interest in the stripped back nature of the practice’s new former car park home. The Google Facebook generation are here, and developers are aware, said Prevc. ‘The suspended ceiling is dead.’
Location is one of the ingredients in making a workplace development socially and economically successful, said Hawkins Brown partner Darryl Chen, particularly with smart clients such as Here East partnering with educational institutions to form an ecosystem where their presence forms a pipeline of talent. In design terms, we are seeing knowledge campuses trading on both their urban and natural characteristics regardless of whether they are located inside or outside the city, he said.
But the idea of a ‘desk', somewhere, where you go and work, has not changed, said Oliver Bayliss, Associate Director at Buckley Gray Yeoman. The difference is that today it is also more about reinforcing company brands, and the employees’ working lifestyle that fuses work with retail and hospitality. ‘It’s no longer an office with a big reception anymore’, said Bayliss. ‘It’s a hotel, a café, a gym'. It’s everything that people want to be around.’
Leasing is another issue, with a trend towards 5-10 year leases rather than 25, said Iain Roberts, Director at Buro Four. And yet you still need those long leases, said Flower, to allow for rent-free periods to pay for fit-outs. Crossrail is already having an effect on rents, and buildings in areas like Shaftesbury Avenue are also changing their orientation to face Charing Cross. It is a similar story at Farringdon and Moorgate. But densities are also up – from around 1:14 or 1:12 30 years ago to 1:8 now, making spaces for extra facilities. Neither does the tax situation help, said Ion Fletcher Director of Policy (Finance), British Property Federation, with its skew towards residential.
What has not materialized, however, is those projections that meetings would all be done online. What employers are trying to do is not chain their staff to their desks or keep them on site unduly through providing staff restaurants, said Pringle. They are simply trying to figure out how to get the best from their employees. ‘The good news is that buildings are going to have to be a lot more interesting’, he said. ‘We’re going to have a lot more fun.’
By David Taylor, Editor, NLQ