A year ago, Devono contemplated what its real estate predictions for 2020 should be. Never could we have predicted the year that would transpire and the changes this would mean for both our private and working lives. A rise in transmission rates and new government-enforced November lockdown has further compounded the uncertainty that businesses and their workforces have felt throughout much of 2020. The COVID-19 pandemic continues to change the way we view the workplace and how we should work.
Whilst the original lockdown in the spring of 2020 showed the resilience of businesses to adapt to new ways of working despite national restriction measures, the summer months and uptick in market activity demonstrated a real desire across the board to return to the office. These two factors have given rise to a greater appreciation and indeed awareness of alternative models of working, leasing and location(s), to help businesses and staff stay connected – one of which is the ‘Hub and Spoke’ office approach.
The ‘Hub and Spoke’ concept is not new. It has, however, achieved greater prominence amongst businesses who are looking at ways of mitigating fears of travelling into city centres, supporting workforce needs for both a physical central and local office, yet also providing a variety of other options for workers. Whilst the main hub could remain centrally located, the spokes can range from working from home, access to a flexible office locally, or even a small regional office local to the majority of workers in a particular area (both current and future).
Such an approach is designed to keep the workforce connected. The pandemic has led to many of us being kept apart from our colleagues and places of work for much of 2020. In the long term this is not viable. Future real estate strategies will place the workforce and productivity front and centre, thereby potentially requiring a more (be)spoke set-up.
One of our predictions for 2020 was for the rise of the next generation of London office markets outside traditional and central business districts. In our predictions edition of the Occupier we highlighted developments in Brent Cross, Canada Water and Silvertown Quays. Whilst the pandemic will have impacted the timelines on these developments, the merits of such schemes, especially as part of a ‘Hub and Spoke’ office strategy, have increased. All of the ones mentioned above are part of mixed-use developments and wider regeneration plans. These can offer a short commute, local amenities and a significant volume of modern office stock.
For tenants, why start thinking of these locations now? There are two main reasons – beating the competition, and price.
Research shows us that businesses of all sizes are resuming searches. Securing space ahead of the competition is still very much alive. Businesses who may have wanted to move to the redevelopment of Battersea Power Station were beaten to the punch by Apple’s pre-let of the entire first phase of the scheme. Pre-lets at IQL Stratford by TFL and FCA secured the newest buildings to greet you at the Olympic Park. Businesses, especially larger ones, continually assess their space plans and adjust them accordingly.
If a flexible workplace ‘hub and spoke’ office solution sounds like the right option for you, DeVono can help. After understanding how your business works, we will build the right workspace package for you. Start your search.
These deals suggest that businesses, certainly larger ones, exit a lease early to benefit from new space and locations. These could be gains related to personnel, productivity and/or cost. Staff links to the physical office may be easier, and access for clients may also be better. A new location out of central London could help with access to talent, housing for the workforce, or even allaying COVID-19 fears. These benefits to a business are not necessarily linked to the bottom line, although can be a significant factor. Regardless of the drivers, the success of new office markets, including outside of central London in the past few years, shows that tenants are not just location-agnostic but are also willing to take a punt on driving new areas of London forward.
Much has been discussed about the future of the office throughout 2020. We are in no doubt that the office as an entity is in a supercharged state of evolution. It is in the hands of its users as to the extent it develops and changes. What we are confident about is that the workplace in whatever guise or location remains a critical tool for businesses.