In the UK, not only has the real estate industry had to navigate the pandemic, it’s also contending with a recession, energy crisis, extreme weather events and increased vacancy rates. With occupier expectations higher than ever and continuously evolving, the UK office market is a complex one and at times feels tricky to navigate. Conversations on the future of the office and how it’s used have moved beyond industry circles and trickled into everyday catch ups between friends and family. With the office under the spotlight, understanding what occupiers want, what frustrates them and how their concerns can be addressed is incredibly important.
The flight to quality playing out
*Source CoStar, UK Vacancy Data
According to CoStar data, vacant inventory in the UK has not been higher since Q2 of 2015; despite this abundance of supply an equivalent fall in the price of rent is yet to be realised. A report from Investors Chronicle published September 2022 states “prime London headline rents fell by just 1% from pre-covid peak and are now only 0.8% lower than before the pandemic”.
How is it that some landlords are keeping rents stable when there’s so much supply? Secondly, for those landlords feeling the hit of vacancy rates more than others, what can be done to tackle it?
The answer to these questions is ultimately underpinned by occupier expectations and their desired experience, which is now so heavily influenced by technology. What is it that occupiers expect and want from an office and its technology? When they find it, they’re clearly happy to pay for it. When they don’t find it, they’re equally as willing to hand the keys back. This will drive a divergence of ‘good and bad stock’ and is evidence of a flight to quality.
Understanding occupier sentiment
With this in mind, we wanted to better understand occupier sentiment; what they expected and wanted from an office, as well as what things drew them to or pushed them away from an office with a real focus on technology’s role in all this.
“Whilst it might feel like today’s landlords and flexible workspace providers have a lot to contend with, there is also huge opportunity. It is important that there is a focus on solving the problems of today, providing occupiers with what they demand, in order to create the meaningful experiences and the best environments to support how they want to be working: in adaptable, frictionless, and flexible environments. If you can address the core problems facing today’s offices, then there is scope to ensure the future of the office, whilst being able to adapt to shifting dynamics as the world becomes more digital, more flexible, and more sustainable.” – James Lowery, UK & Europe CEO
We surveyed 2,500 office workers and discovered a wealth of information around how technology is improving and at times damaging workspace experiences. We converted the research and data into a report which is now publicly available.
In the report we look at what makes office workers tick and we address the role that technology plays in transforming how office space is engaged with.