2021 will be the year of the smaller office, predicts serviced office broker FreeOfficeFinder.
Theย company reportsย that more than a third of companies (35%) that enquired about office space in January and February have said they would be taking smaller offices than their previous workspaces. They follow in the footsteps of the likes of HSBC and Lloyds who recently announced they were reducing their office space due to a combination of falling profits and employeesโ desire to stay at home.
Of that third, almostย two-thirds (62 per cent) said that flexible working was a factor in the decision to move to smaller offices, with their company planning to adopt aย โhybridโ model where employees would rotateย the daysย in the officeย with their colleaguesย to keep the office size needed down to a minimum.ย On average, companies are cutting their office space by 20 per cent. More than half (56 per cent) reported that downsizing was part of a money-savingย plan, while just under half (43 per cent) said that their decision to downsize was due to theย redundancies made within the company.
The increased volume of available office space is driving providers to offer competitive prices and large incentives to new clients, such as initial rent-free periods and flexible start dates. Despite this, the average price for London desk rates still went down 7.2% between January 2020 and January 2021 (ยฃ539 to ยฃ500), while the average price for a desk across the UK decreased from ยฃ285 to ยฃ264 (almost a 7.4% decrease) during the same time.
The pandemic is forcing companies to re-evaluate their office space strategies, and is acting as the catalyst for changes that were already afoot. Remote working was on the rise prior to the pandemic, and according to aย Gartner survey of company leaders, 80% plan to allow employees to work remotely at least part-time following the pandemic.
โWe are already seeing that the remote working trend means that businesses are opting for smaller offices with more flexible agreements,โ commentedย Nick Riesel, MD ofย FreeOfficeFinder. โMany companies simply wonโt require a desk space for every employee, and we expect locations outside of city centres to also experience a surge in demand.โ
But itโs not just remote workingย that isย prompting companies to seek out smaller spaces.โฏIn the short-term at least, FreeOfficeFinder predicts companies will favour private or self-contained offices over open plan co-working areas for hygiene reasons: itโs easier to control footfall and the risk of cross contamination is lower. Other factors influencing the demand for small offices include the increase in the number of companies starting up as a result of the pandemic (UK business incorporations were up 30 percent in the four weeks to mid-December), and companies in some sectors, such as gaming, looking to expand due to a lockdown boom.
And Rieselย believes offices are here to stay: โDespite the positives of remote working, the pandemic has revealed its drawbacks. Success โ for businesses operating in the knowledge economy, for instance โ relies on those spontaneous in-person interactions and light-bulb moments that Zoom just canโt replicate. Offices can also be vital hubs when it comesย toโฏattracting and retaining top talent.โ
