Businesses are rightly focused on developing, retaining and attracting the necessary talent to produce a sustainable workforce, and in today’s highly competitive search for talent, a compelling quality of place is a strong advantage.
Gone are the days when a community’s quality of place was an afterthought for corporate relocation decisions... For example, Squire and Partners, one of London’s most famous architecture firms, has located its new HQ in the energetic, socially diverse community of Brixton. Squire and Partners has opened a new rooftop restaurant and terrace, and a basement event space with free exhibitions.
So what do occupiers now look for? The business world has changed fundamentally; quality of place increasingly translates to quality of life. Places offer a range of amenities including restaurants/bars, gyms, and digital and transport infrastructure that will allow workers greater freedom in the way they work, whether in the office, from home or in a café. Where before tenant demand came down to: ‘Location, Location, Location’, now it comes down to LUCK - Location, Use, Cost and Knowledge.
The old ‘CBD’ model in which the city centre is abandoned on weekends and evenings, is increasingly obsolete. In its place CBDs are being reimagined as places people want to be around the clock, with more developments that contribute to the feel of a location, without removing from the business effectiveness. In the City of London, a commitment to improving transport infrastructure and the public realm has helped the City to remain a global leader; and in doing so has allowed quality of life and business location to coexist.
Quality of life is to a large extent determined by the type of building, the last decade has seen the emergence of ‘smart’ buildings, often located centrally and offering tenants valuable amenities. The buildings that get this right see good letting activity and higher rents as a result, and therefore it is in both the landlord’s and tenant’s interest. 22 Bishopsgate for example will provide tenants with a hotel-like offering, including a two-storey communal food hall, London’s biggest bike park and a wellness centre and gym, climbing wall included. Bloomberg’s new HQ in the City was awarded the highest ever sustainability score by BREEAM achieving 98.5%. The building includes natural ventilation, and use of plants, water and wood to create a healthier more enjoyable environment.
Furthermore, we are entering a business world less dominated by old corporates and increasingly made up of tech companies and start-ups that are subject to change. Increasingly, corporates are adjusting their business models to account for the disruption by tech companies. The new breed of occupier requires space that provides quality of experience and location in one, but often without the commitment. Co-working providers have presented the solution: trendy, short-term space in good locations. WeWork, for example, provides tenants with IT support, 24-hr access and cultural events in central London locations; only four years after its entry into the London market, the co-working operator became London’s biggest occupier. Conversely, co-working throws up issues for planning; if co-working venues continue to be a draw for entrepreneurs, cities will have to ensure their provision to remain competitive.
As a final consideration, over the last decade the submarkets that have seen the greatest change in demand have been those that have benefited from being in close proximity to transport hubs. The arrival of Crossrail in late-2019 is already benefiting the areas surrounding its stations, and improvements to infrastructure away from Central London will likely disperse activity away from some core markets to new locations and will enable greater reach in attracting a wider and larger tenant base.