Office vacancy rates in London are the highest they have been for 20 years.
In part, this is due to the post-pandemic increase in remote working, but commercial landlords are also battling changing work patterns and evolving tenant expectations.
Office spaces that just provide desks are no longer good enough. Now landlords need to provide a space that tenants feel is worth investing in.
Understanding the current real estate landscape in London will help you assess whether your office spaces are meeting tenant expectations, or if you need to adapt.
Vacancy rates
Though office vacancy rates are at a 20-year high, they haven’t been increasing slowly over this time. Instead, the pandemic changed the landscape almost overnight.
In 2019, vacancy rates were low with just under 13 million square feet of space available, a decrease of a million square feet from 2018. Office spaces were filling up and the trend was expected to continue into 2020.
Of course, that didn’t happen. Covid proved that remote working—well—works, which has resulted in offices downsizing or closing altogether. The availability of office space almost doubled, reaching 24.3 million square feet as of Q2 2024.
Consider this:
With 61% of Londoners working from home at least one day a week, offices are an investment, rather than a given. How will you meet the growing preference for high-quality offices that offer more than just space?
Hybrid working spaces
Over half of London’s workers wouldn’t accept a job if it didn’t offer hybrid working and this flexibility needs to be reflected in office spaces.
Many businesses don’t need desks for every employee and prefer spaces that can easily adapt to hybrid workers’ varying office days with hot-desking and breakout areas now the preferred way of working.
Your network connectivity needs to be able to keep up with this fluctuating occupancy. Whether employees are in the office, at home or working remotely, they need to be able to communicate and collaborate seamlessly.
Dependable internet and telecom infrastructure are non-negotiable requirements. Tenants are increasingly looking for buildings equipped with intelligent systems for access control, environmental monitoring, energy management and occupancy tracking.
Consider this:
Occupancy levels for flexible office spaces reached 83% in Q1 2024. How will you adapt your offering to meet this demand?
More than an office space
Beyond just a high-performing space, tenants are increasingly prioritising workplaces that have amenities to support employee wellbeing, community building and sustainability initiatives. The offices that meet these requirements form a new categorisation of office, defined as prime.
These top-tier offices provide shared amenities like cafes, gyms and collaboration zones that foster networking and community. And if there are spaces for tenants to host events, seminars or workshops, that adds further value. Of course, you can only offer these experiences if you have the connectivity to support them.
Tenant expectations extend beyond the practicalities of the space. London aims to be a carbon neutral city by 2050 so office spaces that prioritise sustainability will have more longevity. Indeed, the 30% of office spaces that have BREEAM certification account for over half of the office spaces that are leased.
Consider this:
Sustainability is a priority for businesses, and employees. How could you make your office spaces more energy-efficient?
Leave network connectivity to us
Commercial real estate landlords in London have a lot to consider when taking steps to increase occupancy levels.
At Wavenet, we can take one item off your list. Vorboss are London’s only dedicated business 10Gbps minimum fibre network provider so we can give you the connectivity you need, increasing your network speed and agility in no time.
To find out more, get in touch with our team today and we’ll be happy to discuss your requirements.
Networking & Connectivity, Connected, Vorboss, Commercial landlords
