The King Is Dead, Long Live The King

In March 2020, Zoom shares were trading around $114 on the Nasdaq. By October they were up near $560 and right now they’re a touch south of $300 thanks to the proliferation of vaccines and a slow but steady return to the office. Even the weekly work Zoom quiz has been consigned to the file marked ‘oh yeah, I remember that.’

As many of us are making our way back into town from the comfort of our home offices, it’s a little premature to call the demise of Zoom but it does seem that a return to the office in some capacity hasn’t come a moment too soon:

• Pre-March 2020, 5% of the UK workforce WFH. A month later it was 47%
• In December 2019 there were 10m daily Zoom participants. In April 2020 there were 300m
• 54% of employees increased their working hours at home
• 6 in 10 of new homeworkers felt an increase in demands
• Over half felt as if they were constantly under strain and the same amount felt like their work life and home life became increasingly blurred

It appears that people aren’t fed up with Zoom per se, rather it’s the intensity of video call after video call after video call. One after the other for days, weeks, months…

The buffers aren’t there. There’s no place to go for an informal debrief, there’s no catch-up in the corridor or by the water cooler between calls. There’s no facility to change the pace of the day, it’s just desk, webcam and tracksuit bottoms.

But will we need Zoom when we’re back in the office? We think the simple answer is yes, for a number of reasons. Chief among which is that it’s a reliable way of communicating with clients and staff WFH for part of the week. Secondly, it’s a very effective way to cut down our carbon footprint by saving money on taxi and tube fares across London.

That said, we’re commercial estate agents and there’s no substitute for physically showing a client round a building instead of doing it by videocall and getting back to the cut-and-thrust of office life, but what role will the office play, post-pandemic?

The Office: 2021 and Beyond

Zone 1 is a flurry of building activity, especially in the City. 8 Bishopsgate is a 50-storey tower from Mitsubishi Estate London and Stanhope which will feature commercial space, outdoor terracing, a viewing gallery, a 200-seat theatre, deli, shops and over 900 parking spaces for bikes. Over 2m square feet of space has been approved in the City alone this year and so says Alistair Moss, chair of the planning committee at the City of London Corporation, ‘We’re seeing striking confidence in the City office market from developers, investors and occupiers.’

But these remain uncertain times for the office market. As CEOs and CFOs debate the merits of a full-scale return to the office, will these new buildings ever be filled? The commercial property market is hedging its bets that they will and that there’s still a viable future for the humble office because there is a firm belief that not everyone loves WFH.

In a report from O2 Business which surveyed 2,099 UK adults, it concluded that 10% want a full-time return to the office and 32% don’t want to go back in at all, but there are plenty of what they call ‘mixers’ that want the best of both worlds.

As we mentioned in a previous blog, Barclays supremo Jez Staley has suggested that the days of putting 7,000 people in a single building are gone and that viewpoint is backed up by an Evening Standard poll of FTSE100 businesses showing that CEOs are eyeing a more flexible approach to the working week.

WPP’s Mark Read said that the ad behemoth ‘will never go back to working in the way we did before and our people will work more flexibly, in our offices, with our clients and from home’. David Sleath of property investment and development company Segro said that they had ‘learned from the pandemic that there are times when home working is more productive and suits the lifestyle of our people.’

But while it’s great that there’s been no commuting, lots of time with the family and rolling out of bed at 8.45 for a 9am start, there are downsides.

There are many younger employees who are living, eating, sleeping and working in the same space as well as having to deal with flatmates and discovering that there’s no set times for the working day. There are also plenty of employees for whom the workplace is their only social outlet and for many, collaboration and productivity is easier in the office than at home with myriad distractions.

While business are taking a more forensic look at their space requirements, a high proportion of respondents to the Evening Standard survey said they had no plans to reduce their current occupation in the next three years but they will be expecting to realise savings where possible.

The Office – A Cultural Revolution

Do we continue with the status quo? That might work for a while but it’s unlikely to work in the long term.

The future of the office will be centred on carbon-neutral, environmentally aware space with lots of room for social activity, different meeting environments and more room per desk. Emma Watkinson, boss of online retailer SilkFred said ‘I think offices in the future will need to have well thought out social spaces and meeting environments that promote collaboration.’ She adds that ‘sitting in rows under strip lights in cramped spaces’ will not attract people.

Faisal Durrani at Knight Frank suggests that the focus is very much on high quality, best-in-class space, ‘not least because the quality of offices are increasingly being used in the war for talent, an issue that will transcend the pandemic.’

The biggest losers are likely to be landlords sitting on old stock with cramped workspaces offering long leases. Today’s businesses want coffee shops, gyms, cycle parking and brighter space with less people.

Crucially, they also want space that doesn’t require a commitment to a lengthy lease. Flexible working is no longer the exclusive domain of the innovative digital start-up.

The office is not dead, it just needs a wake-up call and a bit of a re-think.

For all your central London property requirements, please contact us on 020 7629 1088 or email info@bdgsp.co.uk.