• 14 January 2019

Traditional offices facing extinction in co-working boom?

How co-working and SMART technology has changed the office.

With relentless demand for tech-enabled, flexible commercial space sweeping across London, landlords and developers have struggled to keep pace. Traditional office design has long since been left behind, and the focus now falls firmly on delivering the kind of responsive work places needed to suit the modern workforce.

Real estate investment in the UK reached £17.9 billion for the second quarter of 2018, an increase of 15% for the last 12 months. This has led to a flourish of growth across the whole market, shaped by changing demands from all business sectors. From mature corporates to small start-ups, the way office space is used has radically evolved.

Increasingly, tenants are demanding dynamic space let under flexible leasing solutions, with the harnessing of Self-Monitoring Analysis and Reporting Technology (SMART) now crucial to the success of delivering modern office environments. The challenge facing designers, as we move into the new age of the office, is two-fold as they must provide the diverse facilities demanded to improve staff well-being and aid retention, whilst also future-proofing buildings to make them resilient to future change. Their designs must now provide elements of both the modern and traditional, seamlessly integrating the two into one supple space.

Expert View: Co-working and the London Office Market

Casting an eye over this challenge, as well as investigating the current trends in London’s office spaces, was the remit of a panel debate at Bisnow’s recent ‘London Building for The Future’ event. We spoke to panel members Mark Terndrup (Director of Waterman Building Services), David Hutton (Director of CORE), Francesca Gernone (Partner and Head of Interior Design at Fletcher Priest Architects) and Tim Barnes (Business Development Manager at Synapsys) on their views of the office market and how they are responding to the requirements of the modern office user.

Commenting on the impact co-working has had on office sectors, David says; “The demand for this type of space is booming. Central London saw a record 2.5million ft2 of take up by businesses representing approximately a fifth of all commercial office leases in the capital. In the main, these companies are taking quality building stock at prime rents. Cushman & Wakefield’s recent report cited that WeWork now has the largest volume of office space commitments in London, second only to the UK Government, giving an illustration of the volume of demand we are seeing.”

Whilst using co-working space provides a solution for businesses looking for flexible premises in these uncertain economic times, many are also finding it difficult to predict headcount over the next three to five years. As a result, they are looking for shorter leases on office spaces that can be easily moulded to their exact specifications.

Discussing this seismic shift in tenant demands, Francesca says; “There has been a striking diversification in a market now catering for everyone from young start-ups taking their first desks, right up to mature corporate businesses looking to expand and contract in a dynamic way. I see plenty of landlords jumping into the sector to stay relevant and give their tenants what they want. Leasing to co-working operators has become a great benefit to landlords who can be agile, offering both modern and traditional leasing solutions in their facilities. It’s important to recognise that shared-tenancy offerings come in different shapes and sizes, but they all have a clear idea of who their members are, what they want and what they need. They all strive to engender a real sense of community.” 

In the face of this demand, David feels a completely novel approach to office design is required; “Some co-working providers are taking ‘traditional’ offices and stamping their brand over them as opposed to working with landlords and developers to build bespoke spaces around their needs. This means offices are in danger of being ‘fudged to fit’. The big question is – how should building design adapt to address this?”

Francesca responds; “Increased density has become the norm, both for desk and occupancy ratio, and there is a need to cater for larger events or meetings. When co-working businesses take a lease in un-modernised buildings there is often inadequacy in the provision of services like fire exits and stairs, WCs and mechanical services. This can be equally true of new-build stock where landlords have not been forward thinking and have not catered for flexibility.”

Mark considers the building services designers role, saying; “The demand for shorter lease terms means that fit-out, construction and refurbishment costs need to be reduced. As a result, designs must now be more responsive to potential tenant turn-over. Our challenge is to incorporate less-prescriptive, more innovative approaches to our mechanical and electrical (M&E) design.”

“The space traditionally taken by M&E plant has now been recognised as valuable space for amenity use, this has required us to re-assess the way we approach design to release this valuable space for facilities promoting wellness and creating communal hubs within buildings.”

“As part of the wholesale re-imagining of how we respond to the new demands in office usage, we can take advantage of the fact that staff are no longer arriving en-masse at peak times with flexible working now more commonplace, which means the core services and systems must adapt to suit the transient nature of the occupation of a given space. These must adapt to become a Town-Hall meeting space in one minute, then a break-out space the next.”

Mark continues; “We can expect to see a move towards ‘floor-by-floor’ building services design, where each floorplate has its own core services which can be billed and monitored independently. This would allow full flexibility of refurbishment and fit-out and minimise disruption to other users. This enables the development to be more agile and readily-adjustable to attract large businesses as well as start-ups looking to grow. One other future trend we are predicting is a move to a services-billing scheme in the vein of NABERS, rewarding both tenant and landlord for operating and running their buildings responsibly. This system is great for tenant empowerment since the landlord and tenant have to engage much more after building handover.”

With building users now demanding more flexibility in the kind of work place they chose and its design, they also expect increased levels of control over how it operates. As a result, SMART is playing a central role in improving user experience of the office.

Tim says; “Technology is now being applied to provide a more efficient place to work by making offices simpler to use, allowing users to engage with their environment. This gives operational improvement, often bringing with it energy and carbon savings and potential improvements in employee wellbeing. I believe SMART-tech is facilitating a change in how buildings are designed, built, operated and used. With the move towards a more collaborative office environment, understanding changing building usage patterns is influencing the operation of buildings.”

Francesca feels this advanced functionality is vital, particularly because a modern office can now be a tool for attracting and retaining staff. She says; “Clients now want to occupy spaces which embody their brand image, with more and more businesses offering ‘hip’ spaces to their staff by including games rooms, casual recreational spaces, relaxation areas to all add to the ‘funky’ office vibe.”

“Others have focused on giving their offices a ‘members club-house’ feeling, with tenants treated like hospitality guests with attentive concierge staff and a sophisticated fit-out. This was something that we featured at Angel Court to great effect. Offices of this kind are a massive pull, attracting and retaining people, particularly millennials, who now use the workplace in a completely different way to past generations.”

Evidenced by the recent rapid change in the market, the co-working revolution looks set to permanently re-shape commercial office space across London. Driven by the need for SMART enabled, flexible and ‘healthy’ buildings, landlords and developers are now shifting the design of their facilities away from the traditional ‘serviced office’ model, and are focussed on providing tenants with the dynamic, responsive buildings the modern workforce demands.

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