EG’s Future of London conference was held at Printworks on November 5-6, 2018. Whilst the conference covered many aspects of the London real estate market, below is a summary of the main take outs relating to the future of offices in Central London:
- Investment for Central London offices will remain strong
- TMT will continue to drive strong demand for Central London office space
- Shared / co-working offices will continue to expand
- Bottom up employee engagement will drive greater digital connection in the workplace
BREXIT theatrics aside, London will continue to attract investment and the best talent due to the combination of its stable and transparent government, excellent infrastructure and geography. Capital inflows remain strong especially from Asia (Singapore and Hong Kong) and the lack of stock in West End and City offices will ensure that total returns remain attractive to investors.
The growth of the Tech Media Telecoms (TMT) sector has created unprecedented demand for Central London office space. The current vacancy rate of just 4.7% reinforces the demand for London office space from the likes of Google, Facebook, Amazon and Apple. The “big four” now lease around 2% of London’s total office floor space, a big factor in why occupancy is at its highest levels in 5 years.
In the past 5 years, traditional leasing models have been challenged with the average lease term reducing by 50% (from 6 years to 3 years), and in the next 10 years, it is predicted that 50% of all workplace professionals will be “gig workers”, placing even more pressure on leasing models. Currently, co-working (or shared) office space is still less than 5% of London’s total office space, and demand for shared space has increased threefold in the past 5 years. As more unicorns and start ups launch in coming years, the demand for co-working spaces in Central London is only set to increase.
As tech continues to expand, the race for talent places employee needs centre stage, and this is why the words “collaboration” and “community” are often spoken in the context of today’s workplace. Interestingly these changes are being driven from “the bottom up”, as companies listen to the needs of their talent and in turn, building managers/owners listen to the wants of their occupiers. As the focus shifts from “building as facility” to “building as service”, connecting with the entire office building community has never been more important. ECN’s managed content platform enables asset managers to connect with all occupiers and their talent in real time.
So the future of London’s office market is indeed bright because at the most basic level, humans are inherently social beings and the workplace is the hub connecting them. Only the workplace provides these serendipitous collisions where much of the magic occurs. This is probably best surmised by Sundar Pichai, CEO of Google who once commented “…when we have been able to bring people together and operate in an open and connected way, it achieves tremendous impact over time”.
ECN was proud to be a partner of EG Future of London 2018.
Paul McBeth is International Strategic Sales & Marketing Director, ECN.
If you would like to know how ECN can enhance your digital workplace experience, please contact jmorris@executivechannelnetwork.co.uk