Demand for office space returns
With the government announcing that all Covid-19 restrictions will be lifted, it seems that a return to the office is on the cards, especially in England’s capital. According to analysis from Rightmove Plc, both buyer enquiries and asking prices have experienced a huge surge in the last month. With London left as a ghost-town during many months of the pandemic, it seems that the city is back on trend as many look to get back into the office.
In the last months, workers have had the flexibility to work from home, with many benefiting from improved childcare set-ups and balance of domestic chores. Similarly, many workers have taken the opportunity to relocate to a new area, confident that they would not have to spend as much time in the office.
This has led to an increase in demand for commuter belt properties. However, now Rightmove data is suggesting that enquiries for London are up 24% this month (year-on-year); more than any other area of the country. With this, asking prices have increased to a record £667,001 on average.
With increasingly more business returning to the office, statistics have shown 15% more demand for office space than pre-pandemic levels (January 2020). Businesses are seemingly very keen to get back to the office and subsequently are reaching out to landlords and estate agents with more urgency than ever.
Asking prices in London have risen by 2.3% (around £7,785) in what is a record number in the last two decades.
What trends can we expect to see in 2022?
The trend was predicted to be hybrid working with many companies choosing to allow employees to continue working from home. However, it seems that the desire to work in the office has not dissipated entirely during the pandemic, especially for cities such as London.
Although some companies might be downsizing, many offices are looking to increase their office space to comply with the “new normal” conditions such as more space and distance.
Prime office rents are for sectors such as industrial estates, data centres, care home facilities, architects in London, student residences and multifamily properties. Rents for hotels and retail venues were still showing instability towards the end of 2021 with growing uncertainty for the year to come but it is expected that as conditions stabilise, and as we learn to “live with Covid”, these properties will also experience a surge in demand and, subsequently, a hike in price.
One of the key priorities going forward, especially for new-builds, will be making sure that buildings are meeting net zero targets, not only to support the environment, but to save owners substantial amounts of money for ongoing energy bills.
