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| Grateful Acknowledgements to Reuters |
Despite the economic climate we are still building
vast hectarages’ of office floorspace and some key questions keeps coming back
to me – Do we really need all the office space that is being built in our
cities? Who is going to occupy it? And what happens if it is built but not
occupied. Can it be put to other uses?
As some of you may know, I am not only a Chartered
Surveyor and Town Planner but have an abiding interest in the use of technology
for future working, hence the other project that keeps me gainfully occupied on a daily basis www.handyforwork.com – a website and APP
designed to help people work smarter on the move.
Smart technology is allowing us to work from almost anywhere
nowadays and the traditional commute to the office is an increasingly fraught,
time consuming and expensive affair. Wouldn’t that time be better spent gainfully
employed rather than crammed on the 7:30 from suburbia into the city or stuck
on the freeway sucking in exhaust fumes?
Commuting Costs
The average Briton for example spends almost as much time commuting as they do holidaying. Glenn Lyons and Kiron Chatterjee, from the Centre for Transport & Society in the University of the West of England, Bristol, tell us that the average worker in Britain spends 139 hours a year commuting, "the equivalent of 19 standard working days."
Commuting distances in the UK are a great deal more than
the average 2.5 miles experienced in 1980. Nowadays many long-distance
commuters would dismiss such journeys as working next door. It turns out that
one in 25 commuters in Britain now travels more than 100 km (both ways) to work
and 10 percent of commuters spend over two hours a day travelling to and from
work.
So on the day it has been announced that rail fares in
the UK are set to rise again by an average 6.2%, some serious questions are likely
to be asked by those same commuters as to whether they can really afford to
keep doing it at a time when salaries are stagnant, at best. Maybe there’s
another way.
Build it High and let it ….possibly!
A recent Drivers Jonas Deloitte report(1) indicates
that in London there is 9.2m sq ft of office space under construction – up 28%
since six months ago. Construction volumes have trebled since the 2008 market
low and 2013 is set to be record year for the West End market. Activity has also
returned to King’s Cross & Docklands areas for the first time in 18 months.
The report notes “Commercial office
construction increased by 28% in the first quarter of 2012, compared with six
months ago and up 44% since a year ago, according to the latest figures.
However, whilst the report shows increasing construction, levels are still
relatively low in absolute terms”.
The recently opened Shard in London has just under 590,000 square feet of office space,
but few if any pre-lets means that most of this remain empty so far. Some
schemes have ground to a halt pending pre-lets and it is evident from the
report that, ““Despite the upbeat signs from the development data, the
reality is that, for some types of offices, tenant demand remains slow. We do
believe that significant opportunities exist; but get the product and/or
location wrong and the pitfalls could be just as large.”
2013 is set to deliver 2.9m
sq ft of available office space, with an average of 2.3m sq ft expected to be
delivered annually over the next three years. Matthew Elliott, head of London
offices at Drivers Jonas Deloitte, says:
“At first glance, these numbers would appear to be
very light, with average Grade A take-up levels at around 5m sq ft per annum
over the last 10 years, almost double the amount of space that is set to be
delivered. However, occupier demand for Grade A space is declining; 2011
represented the lowest annual take-up in a decade. As a result, London now has
a surplus of quality space waiting to be occupied, with 4m sq ft completed and
vacant”.
Savills European Office Report for Summer 2012 tells a
similar story. They note, “On average, we expect demand
in the second half of the year to be stronger than in the first one, and the
total annual volume in 2012 should be above the 2011 level in a few markets,
notably Amsterdam, Frankfurt and Brussels. Across the markets covered in this
report, the letting activity in 2012 will still decrease, on average we forecast
that it will be down by 7.7%”.
“While
developers and banks are wary of entering the market in the current economic
conditions, an increasing trend of refurbishments of old office stock has
become apparent. In some markets the share of refurbishments has increased from
below 10% to about a quarter of all development completions in 2012, for
example in Vienna (27%), Madrid (26%) and Milan (25%). Interestingly the
refurbishment trend is also very strong in the two London markets, with 58% of
completions in the West End and 59% in the City actually being refurbished”.
Working Smarter
Smart working was specifically encouraged during the
London Olympics to relieve some of the expected pressure on the transport
system and I don’t doubt it will have given pause for thought to many of those businesses
who took up the challenge. The world of commerce did not collapse. Businesses did
not cease to operate through lack of staff. In fact I have yet to hear any
discouraging comments from the London commuting fraternity (or their bosses) who
perhaps worked from home for a few days or travelled locally to a pre-arranged
hub.
Combine this natural development caution with a
growing technological ability to work ‘in the office at home’ (or in micro-hubs
co-working space and the like), the increasing costs of travel to work that
cannot be covered by pay rises, an increasing self-employed sector as a result of
the worldwide recession and a general sense that quality of life is beginning
to take precedence over the 7:00am-7:pm commuter grind and you have a cocktail
of circumstances that might just be the catalyst that changes the way we work
in the future.
I’m not saying for one minute that offices are not
needed nor that our conurbations will instantly become wastelands of redundant office
blocks. But it doesn’t take a rocket scientist to spot the huge amount of empty
space around in most towns and cities at the moment.
So what to do with it all? In the UK the Government
has mused on the idea of allowing an automatic change of planning use from
office to residential and on its face this is an imaginative idea. But they
have yet to get to the heart of the multiplicity of issues that might arise if
such a proposal is imposed in a blanket fashion and the jury remains out on
this one. The key issue is that most business space is neither designed for nor
located in a situation that would allow such a change of use to occur without
itself leading to substantive problems.
Building Smarter
Working in the rural development sector converting
heritage buildings we adopt a standard mantra which is made clear to all our
clients and which I think applies for all future office development, and that
is ‘The Concept of Reversibility’. Always carry out conversions, or new-build
schemes, with an alternative use in mind. If the primary purpose is no longer
required it should be straightforward enough to reverse the building into an
alternative use without having to demolish and re-build. Something we can't do
anyway with Listed Buildings but you get the point.
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| “Barrio de Los Paracaidistas” A prototypical tower for the people of Mexico City With grateful acknowledgement to Design: Metous Studio |
Too many buildings are still being designed with a single purpose in mind and if that use becomes redundant then the building cannot be used for anything else. That is not only a waste of effort but (wearing my planner hat) unsustainable. Perhaps we need to start thinking more about causing multi-use capable buildings to be constructed from the outset and being a bit more flexible on the compartmentalized office/retail/residential zoning that so often maintains. Echo’s of Ebenezer Howard perhaps, but I’m referring to the buildings as much as the settlement forms themselves.
What if new buildings had a ‘multi-role-combat’ ability
with a planning framework that allowed flexible changes of use? If all that 9.2
m sq ft of office space for London were capable of fulfilling more than one
role – residential being the next most obvious land use of value – or maybe
even designed at the outset with multiple use in mind, then maybe we could really
encourage a new way of city living and working.
Ah, I hear you say. The high land values wouldn’t support
such development. Maybe not at the moment; but if new ways of working and
economic uncertainty lead to even a modest reduction in floorspace requirements
then the single-focused office market in city centres that has been the sole driver
of land values for the last few decades may begin to experience a see change; perhaps
not in the very prime locations but potentially around the immediate periphery.
In the same way that technology has revolutionized our
working practices and ability to communicate around the world from wherever we
are I believe that in the medium term the same technology (and its successors)
will begin to significantly alter our working environments too. We need to
think hard now about the future of sustainable city development and about all
that vacant office space.
(1) London Office Crane Survey (May 2012) from Drivers
Jonas Deloitte
