There is light at the end of the tunnel! With vaccines coming through successful trials we can begin to see a way out of 2020 and into the bright sunlit uplands of 2021.
2020 has been a year like no other and it’s one that will have ramifications for many years to come. Certainly the commercial property market has felt it as keenly as any other and those who work in and around it are having to adapt quickly. Whilst there have been many silly headlines about the ‘death of the office‘, most occupiers recognise the huge benefits that having an office brings in terms of productivity, recruitment, culture and general wellness for employees. London, which has seen great turmoil before, will do what it always has done: adapt!
The pandemic has certainly forced a change that was already happening in the office market. The moves towards wellness and green credentials are gathering pace and will be of huge importance to many companies; landlords will have to meet these requirements, which in older buildings will not be easy. Many forward-thinking companies are now focused on issues such as the levels and quality of fresh air (whether it is mechanical or natural), the facilities a building offers (bicycle racks and showers, yoga studios, outside space etc.), the flexibility to create ‘video conferencing booths’ and even charging points for electric cars and bikes.
London continues to see major pre-lets taking place, with corporate occupiers keen to secure cutting edge space in a market short on landlord-led developments. This in turn will create churn in the market, vital for companies looking to expand or contract. Across all markets we can expect rents to soften and rent frees to start pushing out as Landlords compete to secure tenants in a challenging market. Flexibility will undoubtedly become the buzzword for the next 12-18 months.
Whilst the outlook for the leisure and retail sectors is less certain in the short term, once the office occupiers start returning (which they will) we can be sure that the streets, bars, shops and cafés of London will start to get busy!
The next 12-18 months will most likely be extremely challenging but not without opportunities for both landlords and tenants. These two often opposed sides will need to collaborate to deliver workspaces that, to quote legendary architect Frank Gehry, ‘…speak of its time and place, but yearn for timelessness”.
Many thanks to Richard Williams of Ashwell London for his input into this article.