In the pre-COVID era, having a link to the capital in the form of a London office was often said to be one of the best investments that an ambitious business could make. There has often been a level of prestige attached to having an office in the UK’s capital, coupled with the importance of being seen to be seen in the city, and proximity to the UK’s main international transport links and financial centre. However, as a result of COVID-19, commentators have questioned if it is necessary to have a London office space, or should businesses seek out other UK commercial centres that are more cost-effective.
In this blog, we highlight some of the real estate strategies that businesses with offices in city centres should consider in light of COVID-19, and the increasing trend towards remote working.
With COVID-19 forcing more people to work from home, some companies are now considering the perceived benefits of a ‘Hub & Spoke’ office strategy.
Adopting a ‘Hub and Spoke’ office space strategy means that companies have a central, or ‘hub’ office in a city centre location to be used for larger meetings between colleagues and collective collaboration. This sits alongside a portfolio of a smaller office(s) outside the city centre or in the surrounding suburbs, where employees can work on a more day-to-day basis. ‘Spoke offices’ are normally located in areas that are connected to primary transport links so that employees can easily access these offices and reduce commuting times. The DeVono team can help you choose an appropriate location for your ‘spoke’ offices to suit your real estate strategy and unique approach to your firm’s workplace.
Adopting a ‘hub and spoke’ model and reducing office space in the city has its merits – it can help preserve some of the benefits that have been accrued by remote working. Reduced city space can help reduce company expenses on real estate, promote agile working, and through a range of smaller and/or serviced office space, reduce employee travel and commuting. DeVono has the right blend of relationships, knowledge and experience to advise clients seeking to adopt a ‘Hub and Spoke’ real estate strategy. Our team can help you to isolate the best locations, at the lowest costs for your business.
If a flexible workplace ‘hub and spoke’ office solution sounds like the right option for you, DeVono can help. After understanding your unique business needs, we will build the right workspace package for you. Start your search here, or contact us at email@example.com
For those businesses that prefer not to relinquish their presence in London but seek to reduce the overall size of their office space, flexible workspaces or ‘serviced offices’ could be a suitable alternative to a traditional lease from a landlord. Serviced offices available from ‘Providers’ are found across the UK and, in light of COVID-19, could be appropriate for businesses that seek to operate with more agility. Flexible workplace solutions are now used as a percentage of their overall workplace footprint by more than 75% of FTSE 100 companies, evidencing the fact that it is no longer a product or a solution appropriate only for start-up businesses, or those with poor visibility on their changing headcount and/or revenue numbers. Serviced office operators typically allow their customers to scale up or scale down their office space occupancy according to individual client need. Given current circumstances, flexibility such as this is increasingly an attractive prospect for many businesses. With remote working increasingly being adopted by firms of all sizes and across all sectors, serviced offices allow businesses to take up only the space they need in that precise location, thereby reducing costs while maintaining an office and workspace for staff as and when they need it.
The flexible office market offers a range of products, all of which cater to different business needs. In planning the next office move, understanding how best to utilise the component parts of the market appropriately, relevant to your business and your workforce is quite fundamental. As we begin to understand the ‘new normal’, providers who deliver exceptional service and value will garner greater long-term goodwill and loyalty from their tenants. Flexible leasing will now, more than ever, serve as a core option for occupiers.
Although cities will continue to dominate the physical landscape in respect of drivers of economic growth after COVID-19, the workforce is likely to become increasingly geographically dispersed, with businesses taking up office space outside conventional city centres. The lasting memory of COVID-19 is likely to drive this dispersion. For London, it may be exaggerated by the government’s commitment to the ‘levelling up’ agenda of encouraging economic growth outside London and South-East England.
However, at DeVono, we believe that face-to-face interaction remains crucial for collaboration, training, and company culture. Not to mention an office will also serve as an vital place for those who cannot work from home or remotely. Though the face of Central Business Districts (CBDs) is changing, London and other cities in the UK will continue to draw talent to them irrespective of the long-term impacts of COVID. Therefore, having an office space and ‘base’ will remain important, despite current trends towards home working.
Whatever direction your business seeks regarding its real estate strategy, we can help you deliver it. DeVono can help you source and secure office space across the United Kingdom. From Marylebone to Manchester, wherever your business is located, we can support you through this process. We recently unveiled our ‘Commercial Real Estate Roadmap’ to help organisations devise their workplace strategies for the next 12-24 months as they plan their return to the office and implement plans to enable them to Return, Revitalise and Transform their commercial futures.
The coming months remain uncertain, but we believe that our cities will not lose their appeal and will continue to be the drivers of collaboration and economic growth for many years to come. Indeed, as we, hopefully, return to normal in the coming months, the government and business leaders must argue for the importance of cities in driving economic recovery. The nature and role of our cities and offices may have changed due to COVID-19, but their fundamental importance remains – agglomeration and collaboration still matters.
To talk through your needs with an independent agency that only acts for occupiers, speak to DeVono today. For guidance regarding your commercial real estate strategy, you can read our handbook or get in touch with a member of the team on 020 7096 9911.