Joe Rigby, Head of Occupier Services at CBRE, thinks the latter. He is among those hopeful that the return to work means a return to better workplaces, which means new and newly fitted-out office blocks.
Lest you think this is just another cliché, be patient: this one has serious financial consequences. Joe explains: ‘Look at the sectors that are booming just now – the gaming sector is blowing up amazingly – and, in their world, coders and designers are in front of desks and screens a lot, you see a lot of stress, anxiety and mental health issues, so those kinds of tech occupiers have not been slow to talk about new ways of approaching office amenity, and what they want out of an office building. ‘This poses a challenge for developers and landlords, because they have to find ways to make buildings attractive and keep people engaged, and stress-free.’
This trend is now seeping into the thinking of all office occupiers. ‘Today everyone is, in effect, a tech occupier. Even the most conservative occupiers of the past, like the bankers and financial services firms, are now talking tech,’ says Joe.
Not only do all occupiers want what tech occupiers want, but they are also beginning to use the same decision-making processes about their workspace. In particular, demographics have shot up their agenda. Having the right kind of people in the neighbourhood, and the right kind of labour pool (in other words, exactly the kind of thing Google worries about) has become mainstream. This poses yet another interesting challenge for developers and it is at this point that the serious financial consequences kick in.
Office buildings without the right kinds of amenities, and without demonstrably the right local demographics, tend to take longer to let. And the longer a building takes to let, the more expensive it gets for the developer. Six months’ missed rental on a 20,000 sq ft central London floorplate letting at £50 a sq ft, means a cool £1m of income foregone.
With seven-figure losses racking up, developers know they have to get this right.‘Tech isn’t so much a sector anymore. It is driving everything, and it is driving the property decision-making of businesses where the tech headcount may be no more than 10 or 20%,’ says Joe.
And our third question – is something else going on, behind the scenes? The answer is yes. Landlords and developers are adapting to a world in which satisfying the tech-facing element of any business is now the litmus test for satisfying any part of an occupier business.
It does not mean every developer expects to be providing floorspace for coding geeks and cloud-storage specialists. But it does mean that it has to feel like they do.
And if that doesn’t amount to a revolution in the conservative world of UK workspace, nothing will.