Market Insight

Networking and knowledge share: Why it pays to dine out

Anyone who knows me will tell you that I excel at talking and socialising, and I believe it’s these skills which help me to maintain a finger on the pulse of the Thames Valley property market. How?
August 16, 2022
It’s the types of conversations like my chat with a Global Director at Google, a music producer and the CEO of a major food grower and distributor over dinner recently, which really help me to understand how businesses of different shapes and sizes are approaching the return to the office.

In chatting to them, it was interesting to hear their take on the office – both from a cost savings perspective, as well as how they are approaching their workplace strategy.

We debated the merits of a sea change approach versus the King Canute approach of not fighting the wave of employee sentiment against a wholescale return to the office.

Both were keen to see an adjusted week and didn’t feel they could force people to come to the office if, deep down, they didn’t always want to be there. Human behaviour and how we work has evolved over the last two years and Hybrid working demands an adjustment in management culture to suit.

I learnt that even in parts of the world where there has been a strong culture of presenteeism, this attitude is changing and managers need to look at new ways of evaluating employees based on their results, rather than how many hours they put in.

All businesses are going through an office transition phase of one sort of another. Some are carrying on with the plans conceived three or four years ago with a more standard workstation approach but are, very sensibly, making adjustments and migrating to hybrid working as they progress – in other cases these include quite significant changes in design and location.

How should the property industry and office landlords and investors react?

They will need to continue to provide flexible options which are shaped with potential occupiers’ culture in mind, as they evolve and find a new balance.

Around the dinner table there was mutual recognition of the benefit of going to the office for informal learning and to build social capital, with an appreciation that new office design needs to engaging, inspiring and smaller.

There was also an acknowledgement that there is a reduced appetite to commute into busy city centres and that a hub and spoke concept of more offices in residential areas close to staff might prove desirable – multiple bases as part of the office eco-system. This could result in more office development outside of London across the South East market.

What do we need to see more of?

Certainly, better and more modern spaces which are more exciting than home, or which balance well with home life and encourage social interaction and learning – this means less formal office environments and areas to congregate, collaborate and share learnings.

Of course, not every company is like Google or a cool media or Tech Co, so variety is also key. We also need to be mindful of grey space. We are seeing more and more of this return to market and occupiers and landlords alike are going through the motions to work out what to do with it.

There can be value in speaking to landlords and communicating what are your business needs, in order to reach a mutually beneficial outcome. Whether that’s downsizing, moving within their portfolio or restructuring a lease.

Meanwhile, for those businesses priced out of the top Grade A office market, there will be the opportunity to take advantage of some of the grey space to provide a short-term office solution which is both good value and affords you the time to get to grips with what your new workplace strategy should look like.

What is happening with rents?

Office rents across the Thames Valley are growing in some areas, but remain stable in general.

However, in real terms for landlords, rents are falling as greater incentive packages are being offered to incoming tenants, in the quest to fill vacant space.

This can be a slippery slope. In a challenging market, it’s best to do deals than hold on for the best rent (the bird in the hand approach) as next week the terms from your competitors may be even better – go in hard and work with the tenant or go home.

Seek out the positives

What was clear from the networking dinner I attended is that businesses remain motivated to bring their people back into the office, despite the prospect of some interesting months ahead in economic terms.

The question is, how do we make the most of the positives, to grasp the opportunities available to us?

That’s what I’m looking forward to doing for my clients across the Thames Valley and West London region over the coming months – whether they are occupiers seeking new space or reducing their surplus liabilities or landlords wishing to create and lease more attractive space, or investors looking for the next gap in the market.

By getting out into the market, talking to businesses, landlords and investors and sharing with my colleagues, we can look for those opportunities and help clients make the most of the positives that are available in the market for the benefit of their business.