Back to the Office
As lockdown measures continue to ease and the economy begins to open up, one key question in the property sector is how the office market will re-act and adapt to the post Covid lockdown environment.
The pandemic has had an extraordinary effect on how people work which in many cases has led to a re-thinking of the role and function the office performs for a business. This time last year there was a genuine prevailing concern that people may never return to the office environment in the way we previously operated. Remote working from home and video calls have become the norm and many businesses found they were able to change and adapt to the ‘new normal’ with relative ease.
However, 14 months on from the first lockdown and initial fears of a complete move away from offices appear to have subsided. Talking to businesses there seems to be a real desire to return to the office and a realisation that teamworking, collaboration and employee training all suffer from not being together in one place.
Encouragingly this anecdotal desire to return to the workplace appears to be translating into increased activity and occupier demand. Since the start of the year just under 72% of the office space we had available in January is now either let, sold or under offer. This includes the sale of just under 14,000 sq ft of office accommodation in Stowmarket to an owner occupier.
At present the amount of office accommodation we have available is down from the start of the year to approximately 42,000 sq ft. However whilst this increase in activity and decrease in availability is positive news, it is reported with an air of caution. We are beginning to see some larger offices come back to the market as a result of businesses rationalising their space. As more lease events come up, such as tenant break options and lease renewals, there is still a real possibility that availability will increase as occupiers embrace agile working.
Should availability rates rise we could begin to see increased incentive packages and downward pressure on rents, however this has yet to be borne out in the market and first four months of the year demonstrate a strong desire amongst businesses to get back to the office!
If you have a requirement for office accommodation or require marketing advice for your office accommodation please do not hesitate to contact Richard, Jonathan or Ella.
Richard Pyatt MRICS
5th May 2021