"Older, energy-inefficient and less comfortable office spaces are struggling to meet expectations from office workers."
- Andy Miles - Rightmove
Newly released data from Rightmove has revealed that the number of unique enquiries to lease office space has been at its highest point since pre-pandemic, as businesses are looking for spaces that meet modern requirements.
According to the data, demand for office space leases is 19% higher than in the same period a year ago. This comes as many businesses continue to consider how often employees should be in an office together.
A snap poll in Rightmove’s research panel, Living Room, also shed some light on what could attract UK employees to spend more time in an office.
Amongst more than 350 office workers, a shorter commute (51%), free or discounted food (39%), greater flexibility with working hours (34%) and better facilities (29%) were some of the top priorities employees said would make them want to go to the office more.
The things that people found most frustrating about working in an office were the commute (61%), the office temperature (27%) and poor office facilities (24%).
Industry experts suggest that employees' desire to work in top-class office spaces near good transport routes, particularly the Elizabeth Line, is driving business decision-making.
In other trends, demand for commercial property of all types continues to grow as the interest rate environment becomes more favourable. Demand for commercial property is now 19% ahead of Q1 2024.
This quarter, demand to invest in offices has outpaced the industrial sector, which had been leading the way. Demand to invest in the office sector is up by 75% versus the same period last year (a low base), compared with 70% for industrial.
In the leasing sector, demand for leisure and hospitality spaces is up 37% compared to the same period last year. Demand for industrial space is also up 37% as the growth of e-commerce continues to fuel demand for warehouses.
“Modern, well-positioned office space with great amenities and service is being used as an added incentive to attract top talent, to encourage them into city centres more, and is seeing strong demand," explained Rightmove’s MD of Commercial Real Estate, Andy Miles, "Older, energy-inefficient and less comfortable office spaces are struggling to meet expectations from office workers.”
Stephen Page, Partner at Anton Page in London, added, “Post-pandemic, modern offices have become lifestyle spaces rather than just somewhere that people spend the hours of nine to five. Businesses want to be near good transport links, particularly key Elizabeth Line stations, and in a building which has the kind of amenities which excites top talent.
“The higher-end of the market, the best-in-class office buildings, are doing well and seeing strong demand.
“There is also greater demand from medium-sized businesses for offices that are fully furnished and ready-to-go, rather than needing the time and upfront costs for businesses to fit themselves. Landlords have responded to this by offering turnkey solutions across their portfolios. It’s becoming much more par for the course.”
