We are now five years on from the Covid era, where new ways of operating have settled in and changes in collective behaviours can no longer be attributed to short-term anomalies. One key area where behaviours and expectations have changed indefinitely, is commercial property – particularly office space. With greater clarity on what that long-term change now looks like, landlords, property owners and asset managers need to reconsider their offering, to embrace a new attitude and way of operating. In this article we explore what that looks like.
The old world office order
The vast majority of office spaces are rented rather than owned by the inhabitants, but before Covid, leases would often span 20+ years. A company would move in, make the space their own, and benefit from good rates because of the long-term duration of the tenancy. Then Covid happened, and everything changed. Initially, and rightly, most took the changes with a pinch of salt, taking a short-term approach to see what happened.
For a while it looked as though no one would ever go back to the office, then there was a phase where there was a big push to revert to business as usual with everyone on site full time. Now hybrid working has become established as the norm for many organisations, which requires a different approach to the office space rental market.
What the change in office attendance means for landlords
This change in how we use office space has naturally led to a shift in how people think about renting them. Typically, they are looking for shorter leases, better quality buildings, more support from landlords, and environments that their people want to come to work in. It’s no longer a case of supplying a floor with lots of rows of desks and plenty of plugs – these are spaces that need to incentivise employees to be present, both physically and emotionally.
Lots of companies are looking for office space that accommodates fewer people than their total number of employees, knowing that not all members of staff will be in every day. Furthermore, when they do come in, it’s typically not about desk work and individual working, which they can do at home, but collaborative working. So, in addition to the aesthetic design of the space, landlords with a competitive edge will need to be able to support business clients in managing that usage.
How you design the space in terms of the facilities that organisations need becomes important because how you attract your clients will be influenced by how the space helps them to attract top talent.
What are the drivers behind attractive hybrid working spaces?
If we consider hybrid working to be the baseline for attractive office spaces, what are the key factors in creating a great workplace experience? Two of the biggest drivers we have identified are:
- Employee wellbeing
- Inclusivity
Employee wellbeing
Employee wellbeing is not just about the space and how it’s used but what the employee wellbeing linked to that looks like. For example, is there space for bicycles to be stored safely? Is there an on-site gym? Are there showers, break-out spaces, quiet areas? All these things that were once a luxury are largely expected as standard in modern working environments now.
Inclusivity
From an employee point of view, inclusivity has always been a factor, but it’s much higher up the agenda now, and it has a more diverse meaning as well. Businesses are asking themselves how they create an environment that allows all employees the same opportunity.
Where once inclusivity was solely about accommodating very visible, physical disabilities, and that’s still very important, it’s also about enabling people from different backgrounds, supporting neurodiversity, and more. As an employer, the question of whether or not you’re inclusive requires greater interrogation – asking yourself what it means, what it looks like in practice, and what facilities you need to provide?
Considerations include (but are not limited to):
- Adaptable desk sizes
- Different types of screen
- Quiet spaces
- Different lighting options
- Way finding and signage
A new understanding of the working environment
Of course, the path to these changes in terms of wellbeing and inclusivity had begun before Covid happened. A great example was Unilever’s London headquarters, which was ahead of its time – designed to resemble a hotel experience as part of a major, award-winning renovation in 2009. It was complete with living room-style spaces, flexible spaces, lots of natural light, and experience-led style. The goal was to create spaces people wanted to be in.
Now, that mindset is more prevalent, but needs to be considered against the backdrop of shorter leases. That context has changed the wider scope of office spaces, what they offer, and how. For landlords, it’s no longer about winning a tenant once, but continuing to win them time and again.
In short, where client experience was a luxury consideration before the pandemic as far as leasing office space was concerned, now it’s an integral part of the business model. Those with buildings to lease need to continuously engage with commercial tenants to understand what it is they need from their landlord and property in order to be a better employer. After all, five year leases go by very quickly.
The role of Millennials and GenZ
The narrative around the changing needs in office environments is often glibly laid at the door of Millennials and GenZ, under a stereotypical banner of laziness or a lack of realistic expectations. In truth, the change comes from lots of areas, but where the arrival of these younger generations in the workforce is timely, is that they embody wider changes in how people are motivated and what their aspirations are.
GenZ in particular are motivated by different things to older generations. They are inspired by experiences and emotional fulfilment rather than job security, a good title and a regular pay review. The role of a work/life balance is also important to consider.
There’s therefore an opportunity for employers within that to attract younger talent and make the most of their skills by understanding their motivators. However, it has to be done with authenticity. There are examples of employers who have fallen foul of rolling out perceived incentives which are, in fact, calculated to get more working hours out of employees beyond their contracted agreement, inevitably causing backlash.
Putting ideas into action
Of course, not all aspects of employee wellbeing are the responsibility of landlords. Many facets of a working environment are down to the employer themselves and are not dictated by the building and its amenities. However, landlords are in a position to offer a framework in which employers can more easily create the kind of workplace their employees want to be a part of.
The crucial takeaway for landlords, therefore, is that their role is no longer one of passive customer service, but proactive customer experience that aims to attract and retain clients through a combination of space, design, and service. It’s a new approach to office leasing that we have worked on with a number of clients and at CGA we always address this as an opportunity, thinking about the customer perspective and aligning that with measurable data points to create clear, actionable strategies.
In particular this is how we worked with Canary Wharf Group, who came to us for a project focused on bringing client insight into the business, to better shape their role as a landlord as part of their transformation of 128 acres of once-derelict dockland in East London into the very definition of what a city can be. The multi-phase project included creating account plans for their office customers, who are crucial to the estate, mapping the journeys of key customer types, and providing recommended client data points that have enabled them to move forward with a thriving community fit for the modern age.
Will Griggs, Customer Insights Manager at Canary Wharf Group, said: “The deliverables were clear, useful and well-received with actionable steps given that we will take forward.”
by ForgetWP®