Creating the office environment of tomorrow
In the pitch and roll of the pandemic, cutting free from the office anchor was a necessity for many firms’ survival. Yet as tides of commercial practicality increasingly wash over operations, a good number are seeking to drop the bower again. With COVID-19- induced flexible working having become stitched into workplace fabric, reestablishing a fixed base – and with it encouraging staff to return to the office environment – represents, for many organisations, a significant challenge and has materially changed demand in the commercial office sector. In a roundtable led by the commercial property team at Tees Valley independent commercial law firm The Endeavour Partnership, members explored the changes, considering how landlords and stakeholders can rise to the challenge.
April 4, 2024
HOW DOES THE COMMERCIAL OFFICE SECTOR LOOK POST-COVID-19?
From kitchen tables to makeshift ironing board desks and box room revamps, the pandemic didn’t so much redraw as completely revolutionise working patterns.
The time of the commercial office was up, predicted many commentators, replaced by a new epoch of remote working. But with the anticipated bricks-and-mortar exodus having failed to materialise, many companies have reconnected with the advantages a commercial office base can provide.
What has changed, though, said Alexandra Ketchley, a senior associate in The Endeavour Partnership’s commercial property team, are employers’ philosophies, with the office metamorphosing from a place of convention to one of opportunity.
She said: “The immediate thought after COVID-19 was that most businesses’ need for office space had dramatically reduced, and companies would be keen to realise the cost savings of offloading as much office space as possible.
“However, with many companies still bound by previously agreed contracts and arrangements, this time lag has created the space for businesses to step back slightly and consider more carefully the value a fixed office base can bring.”
SO, WHAT ARE THE ADVANTAGES OF A PERMANENT BASE?
Whether a headboard, a leaning tower of laundry, the kitchen clock or an artificially-created cityscape, we’re all more than familiar with video calls and their varied backdrops.
But for all their COVID-19 necessity and latter-day convenience, technology, said roundtable members, will never replace the personal touch, which they agreed is vital for employee development.
Alexandra said: “Being in the office allows for collaboration, which mutually benefits the employer and employee.
“The pandemic led to junior staff working more independently, but being exposed to more experienced colleagues in the learning environment of an office allows for greater opportunities to absorb knowledge and working practices from more experienced colleagues, as well as benefit from closer supervision.”
Mike Greene, chief executive at Stockton-on-Tees Borough Council, agreed, highlighting the value of impulsive exchanges.
He said: “Things learned outside meetings and relationships made over a coffee are just as important as formal working practices.”
Equally important, said Natalie Kay, partner in The Endeavour Partnership’s commercial property team, and Chris Pearson, partner in the office and retail agency at commercial property consultancy Naylors Gavin Black, are the connections spawned from simply being in proximity to other professional contemporaries during the working day, which working from an office in a commercial business district can provide.
The group agreed the commercial office environment can be an important tool for companies to entice workers back to a collaborative working environment.
But Rachel Fergus, UK insurance and facilities manager at Stockton-based multinational logistics company Den Hartogh Group, highlighted the key challenge for businesses was to find balance, enabling them to access the benefits of collaborative working, while recognising the importance of flexibility to employees.
She added: “One of the first things we’re asked about during interviews, particularly from those employees in their 20s, is flexible and home working.
“We understand the importance of this to employee retention and have adopted a hybrid model where, staff can split their days between the office and home.”
WHAT, THEN, ARE BUSINESSES NOW LOOKING FOR THEIR COMMERCIAL OFFICES TO PROVIDE?
Compare and contrast the rainy, traffic heavy commute against the ease of waking and walking to the room next door to begin another day, and the benefits of flexible working are obvious.
What companies need to do, therefore, said panellists, is create an office landscape that caters to the needs of employees who are not well served by home working – new technology, pragmatic working spaces, attractive vistas, social hubs and access to facilities, which add real value.
Alexandra said: “What businesses now need their commercial offices to deliver is a dramatic change from what most businesses were seeking pre- COVID-19.”
Dean Benson, founder of Stockton-headquartered digital marketing agency Visualsoft, whose offices serve as a blueprint for those companies seeking to create a “destination office,” discussed his company’s continued investment in working spaces like pods and an auditorium, but also acknowledged firms must go further than just fit outs if they are to create a place employees genuinely want to come to work.
He said: “It’s about encouraging collaboration between teams.
“We have running and chess clubs, for example, which allow people who want to get together to do so; you must encourage like-minded people in that way.”
Dean found support from Rachel, who added: “One of our core values is fun in business.
“Our offices can deliver that for our employees through social events like our breakfast club and summer barbeques, alongside health and wellbeing and gym facilities.
“That said, we are continually being asked for more.”
Mike concurred, highlighting the challenges firms face in retaining employees in an increasingly transient workforce.
He said: “Go back 15 years and someone would join an organisation and stay.
“But the landscape has now changed so much that businesses need to do much more to stand out from the crowd.”
Natalie used The Endeavour Partnership as a case study to emphasise how requirements for commercial offices are evolving amongst tenants.
She said: “Looking to the future at Endeavour, although there are typically far fewer employees in the office each day than pre-COVID-19, we are not necessarily going to downsize but we certainly will be looking to use the space we have very differently – incorporating more technology, better collaboration space and improved social areas to create an enhanced client and employee experience.”
Chris added: “It hasn’t been the death of the office.
“Every business with the opportunity to break a lease has gone back to the drawing board to re-evaluate what their commercial office space must deliver for them.
“It may be more serviced facilities, it may be smaller spaces spread across different locations.
“The demand remains, just in a different form.”
HOW CAN SUCH CHANGE BE DELIVERED?
As for the ability of the market to meet changing demands, the panellists advocated the ripping up
of outdated building blueprints, throwing out siloed spaces and regimented desks to create open-plan, collaborative hubs that meld tactility with technology.
Chris said: “The last few years have actually been positive for the local office market, but only if you’ve got the right buildings and they can be adapted – the cost of refurbishment works needed mean landlords either have a problem, or an opportunity.”
There was agreement around the table that those able to invest in their commercial office offerings to enhance the facilities available to prospective tenants in line with the changing demand are likely to enjoy the highest occupancy levels.
Chris also highlighted serviced office provision, using flexible workspace operators Orega and Cubo – which have taken parts of Newcastle’s St James’ Gate and 12-storey Bank House, respectively – as examples of ways to bring new working cultures to buildings.
He was backed by Natalie, who said such moves hold great capacity to reintegrate North East natives presently working flexibly for firms across the UK into the area’s commercial landscape.
She said: “Historically, a lot of people left our region to work in larger cities elsewhere in the country.
“Many of these people now find themselves working remotely most of the time.
“With the cost of living being far more affordable in the North East than a lot of other areas, people employed in other parts of the country could actually now live here and make use of good quality shared office space in the region, in the process meeting other like-minded people and businesses.”
Dean also urged companies to take matters into their own hands and develop stronger alliances between neighbouring firms to share assets such as car parking, meeting rooms and physical activity hubs.
He said: “Our auditorium is not used 24/7 – it could be used by others.”
Chris suggested exploring the idea of neighbouring building owners joining into a co-operative programme, in the hope collaboration could deliver new shared office infrastructure more efficiently, while also sparking greater commercial cross- pollination between businesses.
Alexandra added: “It would be priceless to have a culture where businesses mix on a regular basis in communal areas outside of their own building, and it would be an equally fantastic way to meet tenant demand without every landlord having to invest in their own building in similar ways.”
COULD THE WIDER IMPACT OF OFFICE REDEVELOPMENT ALSO HELP CATALYSE TOWNS AND LOCAL ECONOMIES?
Along Stockton’s high street, monumental change is happening.
Where the town’s Swallow Hotel and Castlegate Shopping Centre once stood as commercial pillars, heaps of rubble are now the only marks of their existence.
Demolished amid a council programme to breathe new life into Stockton’s heart, the space is being transformed into a ribbon of greenery where large-scale community and market events will complement traditional high street commerce.
Citing Stockton’s Teesdale Business Park, which both The Endeavour Partnership and Visualsoft call home, Mike spoke of a natural symbiosis between urban redevelopment and the office revamp.
He said: “The retail sector in the 1990s had the view of cramming stores into a space.
“But people want much more from town centres now, like leisure opportunities, places to dwell and activities.
“It’s the same with office parks; those that just cram people in aren’t going to sell it.
“Towns are going to come out of the new way of working better than cities, in the sense you can have office space in nice surroundings where the commute is short.
“If we have offices next to centres with increased leisure and dwell time, it is the perfect setting.”
Mike was supported by Alexandra, who viewed the situation through a prism of commercial reality.
She added: “We want landlords to invest, but why would they if we don’t have a wider urban centre that is going to attract businesses and people, and make them stay?”
Dean raised the importance of easy access to the commercial sectors of the town to allow business to properly integrate into the wider local area, including the revamping of existing walking and cycling routes to encourage more sustainable travel and urged greater investment in public transport.
Dean said: “Thornaby station is a mainline rail station.
“Small changes, like adding a colourful path to create a nicer journey from the railway station to the business park and including business park branding at the station, could make the business community feel much more integrated to the wider town.”
Mike added: “It’s a long-term process, and we need to work with both strategies, certainly in the short-term, to start actioning positive change.”
The Endeavour Partnership
As the largest independent commercial law firm in the Tees Valley, The Endeavour Partnership is experienced in all aspects of business law. Recognised for
its specialist departments and multiple layers of expertise, the firm offers commercial legal solutions that go beyond static advice and is committed to producing innovative options for clients while demonstrating business-focused thinking.
To learn more about its commercial property team and the support it provides, contact 01642 610300.
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A firm of Chartered surveyors and commercial property consultants based in Newcastle-upon-Tyne. It brings a fresh and dynamic approach to the North East’s property market, striving to offer the best possible results for clients.
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April 4, 2024
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