The future for city centre office use remains uncertain until we see how the return-to-work drive pans out, but in all likelihood fewer people will travel into these offices on a daily basis. There could be more working from home, and as companies take space in smaller neighbourhood offices and retail units.
The theory appears to be being borne-out in practice, with the likes of South London property agents Henshall & Partners reporting a 60% surge in demand for suburban leases.
Henshall’s MD, Chris Henshall says their figures show that demand for ‘fringe neighbourhood’ commercial space in London has increased by 60% in the past six months, an office type which fits-into what is likely to be future remote and flexible working very easily.
Small neighbourhood offices allow office workers to avoid public transport, to travel in by car, providing there are parking spaces, greatly reduces travel time, and allows specific teams to meet regularly, maintaining that all-important continuity of work-flow and personal contact – something that’s almost impossible to fully replication on-line.
The move will be a boom to small-scale commercial office landlords, whose office space had largely fallen out of favour, and it’s likely to revitalise some high streets as cafes, restaurants, and supermarkets start to expand out of central London and other major cities.
Henshall reports that already several food and beverage businesses have anticipated the change, acting quickly to relocate as more flexible home workers start visiting local shops.
Over recent months, Henshall & Partners have managed to secure leases on several suitable premises, deals which were typically, until now, in unviable parts of London.
Henshall cites, as an indication of the trend, deals including a German Donor Kebab franchisee on Eltham High Street, letting for 40% more than the previous tenancy, a Turkish grill and lounge bar on Lewisham Road, which has let for £40K per year, and an organic café in Greenwich which let for £30K a year
A retail unit on White Hart Lane Tottenham has sold for £700,000 and is set to open as a supermarket, topping off a string of deals which show the trend is more than just a “flash in the pan”.
Rents in places like Greenwich and Lewisham are markedly cheaper than in the West End or the City – posing something of a threat to some of the mega landlords in the city with high-rise blocks, And also city centre retailers, but Henshall & Partners see this “rebalancing” as a positive for local neighbourhoods, and as an emerging way forward for London businesses without hurting the mega landlords too much.
There are signs that City and West End businesses are now over the worst as workers gradually drift back to their offices, albeit with considerably enhanced Covid precautions and re-structured floor space.
Chris Henshall’s MD says:
“In recent months we have seen an increased demand for commercial property in London’s fringe neighbourhoods, most notably from the food and beverage industry. This uptick in commercial demand highlights flexible working being implemented across the capital. I am however keen to see a more balanced approach from employers as restrictions are eased with time in the office essential for productive business and its importance to younger employees to learn and prosper”.
Henshall & Partners was founded in 2017 by Chris Henshall, who has over ten years of experience in the commercial property industry. Henshall & Partners offer services focused on land, development and investment properties across London and the Southeast.