Real Estate partner Glenn Ruddy, at international law firm DAC Beachcroft, featured in Bisnow's recent London Market Update event. He considers emerging trends in the offices sector as we head towards 2025.
Remarkable dichotomies are evident in a marketplace adjusting to significant change brought on by new working patterns, ESG and user requirements. These are being absorbed, with an understanding that the landscape has changed irrevocably, creating very good news for some and very bad news for others. These are some of the trends at either end of the spectrum that stand out for me.
- Supply and demand: Home working is integrated into the office timetable. Successful office environments have "earned the commute" and are experiencing high demand and rental growth at a time when the pipeline is low. Inner courtyards, roof terraces and appealing communal spaces are all elements of the new prime space. At the other end of the marketplace there is a reluctant acceptance that some offices are obsolete and have lost their original purpose. Refitting is not financially viable when value has collapsed.
- Hi-tech and hi-touch. Back of house, digital technologies are being applied to monitor, diagnose and future proof. Front of house is taking a lead from the hospitality sector with warm welcomes, appealing aromas and baristas. It's an experience that is about enticement, not interrogation.
- Developers and occupiers have energy efficiency as a priority, but differ in their approach. For the developer the building is seen as an integrated whole, with systems ideally interconnected for optimal energy saving. For the occupier , green inside their own four walls takes priority. Efficiency requires data sharing and for occupiers privacy concerns trump data exchange.
- A circular economy requires some very different skills sets – both highly contemporary and very Technological advancements require data specialists to analyse large volumes of information. Artisans are needed as well; for example, stone masons with skills that date back to the medieval era to restore damaged facades. We have skills shortages here and also across the recycling spectrum. We need to become much more adept at reusing and are likely to see an increase in specialist contractors.
We are all pioneers as we respond to the change in what we need from our workplace. The winners in 2025 will be those who can move fast to respond to new requirements and take advantage of new technologies, while not losing the human touch. Clever analysis is not just about understanding data, its also about understanding behaviour and diversity of need.
