Since we shared our predictions for how we think the global health crisis will impact office space rentals early on in the pandemic (April 2020), we’ve seen some interesting trends begin to emerge. Our data reveals that there has been a 45% increase in enquiries for smaller offices outside of the M25 since May, compared with 23% for Central London.
Let’s take a look at what’s prompting this demand for smaller offices in regional areas.
COVID-19 is Accelerating Existing Workspace Trends
The ‘commute’ was falling out of favour prior to the pandemic, as an increasing number of office workers started to embrace flexible working.
A global survey by the infrastructure architects Weston Williamson & Partners of more than 2,000 commuters in 10 major cities revealed a pre-coronavirus reduction in commuting of 2-5%. 60% of managers and professionals were already working partly from home.
"Fewer people have been travelling at rush hour but although the numbers are just a few percent they are significant numbers - from New York to Los Angeles, to Paris or Berlin. So it's quite a trend,” said the firm's co-founder Chris Williamson, in a BBC article.
Data suggests that “flexible working” is far from a fleeting trend—it’s here to stay. According to employee engagement platform Peakon, employee comments featuring flexible working-related terms increased by 18% between 2018 and 2019, with terms such as ‘WFH’ and ‘flexible work hours’ becoming more popular.
Similarly, employee comments about environmental issues increased by 52% in 2019 (year-on-year). This ties in with people’s changing attitudes towards commuting.
Our attitudes to work have shifted in line with the economic landscape. Higher living costs mean most people can’t afford not to work, and single income households are in sharp decline. Again, in order to manage work, family and life in general, flexible solutions are needed.
The demand for flexible workspace in general was already ramping up before March. There’s been an appetite for flexibility among the SME community for years, however more recently corporates have started to get on board with agile office solutions.
Free Office Finder expects serviced offices to gain yet more traction now that companies of all sizes can’t risk being tied into a long-term lease.
“Flexible providers are now starting to offer terms that factor in an outbreak into agreements,” explains Nick Riesel, Free Office Finder’s Managing Director, who believes that break clauses “will need to become embedded in flexible operators’ strategies to give companies peace of mind about committing for more than a month at a time.”
A Higher Demand for Smaller Offices in Regional Locations
Needless to say, the coronavirus pandemic has acted as a catalyst for the increase in flexible working and the reduction in commuting. Environment aside, people are avoiding public transport for health reasons, and many routes are running at a reduced capacity to allow for social distancing anyway.
However, rather than a reduction in enquiries, new data reveals that there is still a need for office space—but in a different form.
“Since April/May 2020, we’ve noticed a shift in office size requirements; staff redundancies and a widespread move to remote working for existing staff are prompting companies to search for smaller offices,” Nick continues.
Offices located outside of city centres are also garnering more attention, he explains.
“In the same time, we’ve seen a 45% jump in requirements for offices outside of M25 and only 23% for Central London. We believe some firms are looking to relocate out of Central London to reduce travel on public transport and reliance on spaces with high footfall in order to reduce the risk of the spread of infection.”
As companies adopt the dispersed team model, perhaps coworking/ serviced office operators with a range of regional locations will experience the biggest increase in uptake. Businesses may decide to purchase flexible memberships for their staff at offices nearer to where they live, and only get them to travel to their main office in the city when necessary.
Yet the most likely outcome, according to Nick, is that no one approach will dominate. Companies will do what’s best for them and their employees, with some adopting part-time remote working approaches and others eventually returning to centralised locations in the city. Choice is key.
“I believe the final result will be somewhere between where it was pre-lockdown and where it is now. Some firms will continue with the strategy they’ve implemented. Others will come back into the fold for an office in central London when the threat of Covid has tapered off.”
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