Where could ‘third spaces’ boom?

When the long-term future of distributed white-collar employment is discussed, one phrase thrown around with regularity is “third spaces” – a simple, catch-all term for places in which office-based work can be conducted but which is neither a traditional HQ nor the home. Suburban offices are a similarly hot topic; different from a generic third space and worth the distinction, but ultimately leading to the same outcome – a rise in alternative working environments closer to where employees live. For office developers and landlords, a critical conundrum to solve in the short term is how to pinpoint those locations likely to see the most intense demand for these types of spaces. And, although some crudely drawn concentric rings around major cities would serve as a basic “suburban belt”, the analysis can be more forensic. The British Council for Offices calculated in 2018 that typical space-per-desk nationwide is now around 9.7 sq m. So, if we consider resident white-collar employee volumes by local authority against existing provision of office space in that district, we start to identify geographical clusters across England and Wales that appear to be significantly undersupplied if a rise in remote working leads to greater demand for third spaces. LONDON Lewisham 2.1 sq m of office space per white-collar resident Bromley 2.5 sq m/wcr We start with a pair of undersupplied south London boroughs. Lewisham and Bromley are home to a swathe of white-collar commuters across their respective suburbs, but do not come close to providing a commensurate level of physical office space. These are the sixth and 15th most undersupplied local authorities by the metric of square metres per white-collar resident. That might be expected given the historical relationship between central London’s business district and the residential outer areas. However, given the swelling number of professionals who have settled in these more affordable boroughs throughout the last decade or so, they may now offer better opportunities for business space as office-based work becomes more geographically distributed. Certainly, there are enough developed urban centres within these boroughs to feasibly support an increase in local working if an adequate volume and diversity of workspace provision came through. EAST OF ENGLAND Rochford 1.8 sq m/wcr Castle Point 2.0 sq m/wcr Maldon 2.1 sq m/wcr These are the three most acutely undersupplied local authorities by this metric in England and Wales, and they all border each other. The likelihood is that white-collar residents in these three areas usually either commute to central London or work in the neighbouring towns of Basildon, Chelmsford and Southend-on-Sea – and so historically there will have been little requirement for more localised provision of office space. This part of the country could become a case study of the exact nature of the intermediary space between the office and the home, and what types of locations will stand to benefit most from the shift in working patterns. Will those three adjacent towns mentioned need to swell their office provision to account for erstwhile London commuters’ desire for third spaces closer to home? Or will the smaller settlements within Rochford, Castle Point and Maldon need to offer all residents the opportunity to work even closer to home in a surrogate office environment? WEST MIDLANDS North Warwickshire 3.5 sq m/wcr Lichfield 4.1 sq m/wcr Cannock Chase 4.2 sq m/wcr South Staffordshire 3.1 sq m/wcr This cluster arcs above the northerly and western edges of Birmingham, bordering Wolverhampton, Walsall and Sutton Coldfield. It also envelops another local authority in Tamworth which, at 6.3 sq m of office space per white-collar worker, is slightly better supplied than these four districts but still with some headroom to accommodate an increase if the requisite demand is present. Not all white-collar residents within this cluster will have their workplace nominally based in Birmingham. These districts are also most likely home to workers who would ordinarily be commuting five days a week to Coventry, Stafford and Telford – and have a variety of well-located places that could adequately support increases in more local workplace provision – including the city of Lichfield itself. SOUTH WEST (1) West Devon 2.3 sq m/wcr Torridge 2.4 sq m/wcr Mid Devon 3.2 sq m/wcr We have split the South West into two different cluster types – this one being a more rural area across Devon. There are parallels with the East of England insofar as there is not a great variety of different settlement types within the cluster – but unlike Rochford, Castle Point and Maldon, it is less clear where white-collar workers are already commuting to. The most likely destinations are towns and cities adjacent to the cluster in Taunton, Plymouth and Exeter – and so if the national trend of distributed work does take hold even in smaller types of communities in a meaningful way, then Devon is the most likely place that this will happen. SOUTH WEST (2) North Somerset 4.1 sq m/wcr Sedgemoor 4.1 sq m/wcr These two equally undersupplied local authorities either side of the Mendips are situated on the south-westerly edge of Bristol city centre. As such, they likely accommodate a swathe of white-collar workers who would ordinarily venture into Bristol on a daily basis – albeit with the southern side of Sedgemoor also being close to Taunton. The cluster also has its own significant town in Bridgwater, which may be able to attract more daytime office workers and associated footfall through third-space provision. Also within the boundary of this cluster are a handful of seaside towns which, if broader national trends apply on the Somerset coast, will be looking for forms of reinvigoration. Weston-super-Mare, Burnham-on-Sea and Clevedon could all, in theory, tap into the demand for surrogate office spaces if they are adequately provisioned with enough resident white-collar workers to support such an expansion. However, if the bulk of said workers are actually living in the scattered inland towns and villages, it may be those types of communities which end up profiting from the shift in working patterns (absent any great desire from the resident workforce to take in sea air during a day’s work, of course). EAST MIDLANDS Erewash 3.3 sq m/wcr Rushcliffe 3.8 sq m/wcr Amber Valley 4.2 sq m/wcr Melton 4.7 sq m/wcr Gedling 3.6 sq m/wcr Nottingham is effectively enveloped on all sides by the local authorities that likely accommodate the bulk of its office workforce – with the remaining part of this five-strong group of local authorities forming a band that stretches north-west to south-east between Derby and Leicester. In a similar vein to the West Midlands cluster around the north of Birmingham, this group of local authorities hosts not only a variety of location types which could theoretically house additional office provision, but also relatively strong road transport links between the different districts to enable greater interspersion of employees and workplaces. YORKSHIRE & HUMBERSIDE Selby 3.0 sq m/wcr East Riding of Yorkshire 3.8 sq m/wcr The two local authorities directly to the east of Leeds appear to form the main part of the residential hinterland to Yorkshire’s primary office market, with the southern and western side of Leeds in particular bordered by various conurbations already adequately supplied for office space. With York and Hull also playing host to a significant volume of office-based businesses, it is likely that this large area spanning the two local authorities is home for commuters to those three cities – and perhaps even Doncaster as well. The eponymous market town in Selby is a strong candidate for increased workspace provision, being located fairly centrally between the four cities and boasting strong road transport links. Moving further east, there is a smattering of smaller towns dotted among rolling countryside and agricultural land which could theoretically play host to increased workplace provision should they have the localised white-collar population to do so. Along the East Riding coastline, smaller communities might benefit from added provision, but the further east that you go within this cluster, the reduced likelihood that you’ll find office workers who primarily used to commute to anywhere but Hull – and, as such, the range of white-collar workers to potentially populate third spaces becomes markedly thinner. NORTH WEST West Lancashire 4.1 sq m/wcr Chorley 3.4 sq m/wcr These authorities combine to form a small pocket of Lancashire nestled between two of the country’s largest city office markets in Manchester and Liverpool, so the relative undersupply of office space per resident worker is unsurprising given traditional commuting patterns and city-centre domination of office-based work. The cluster is unusual insofar as it is challenging to assess whether any significant boom in third-space provision would benefit places within the local authorities (such as Ormskirk or the town of Chorley itself), or those just adjacent with room to accommodate more workspaces. For example, neighbouring districts St Helens and Wigan are also relatively undersupplied at 4.9 sq m and 5 sq m per white-collar resident respectively, and so their eponymous towns may well be the third-space destination of choice for residents who live towards the southern side of the cluster. On the western side, there is Sefton – which, at 6.5 sq m per white-collar resident, is slightly better provisioned at present. But towns within the local authority such as Southport or even Formby may end up providing competition in delivering intermediary office spaces, depending on the granular distribution of where office workers live within West Lancashire in particular. WALES/WEST MIDLANDS Monmouthshire 4.8 sq m/wcr Herefordshire 4.0 sq m/wcr Malvern Hills 3.8 sq m/wcr Wychavon 4.0 sq m/wcr This cluster is geographically the largest, with Birmingham the most likely “usual” working destination for white-collar residents on the northern frontier of Malvern Hills and Wychavon in particular. Those living in Monmouthshire are more likely to have commuted into Bristol, Newport or Cardiff during the “old normal”. Connecting those three local authorities via the English-Welsh border is the largely rural Herefordshire, which has its eponymous city as its epicentre and shows up as being undersupplied for local office space by our metric. There is, therefore, potential for either Hereford itself or some of the smaller surrounding towns and villages to accommodate third spaces. Within the cluster sits Worcester, which comes out as only marginally undersupplied at 7.9 sq m of office space per white-collar resident. It will be telling to witness whether these types of locations become apposite providers of third spaces for the surrounding worker community at scale, or whether those shifts in working patterns will generate more granularly distributed environments for office work in small towns and villages. To send feedback, e-mail graham.shone@egi.co.uk or tweet @GShoneEG or @estatesgazette