London office occupiers crave sustainability and amenity

COMMENT: A typical average lease length today is around eight years. It was 25 years when I first started out. This trend doesn’t surprise many of us in the industry – co-working and flexible office space is here to stay. It makes up 5% of the central London office market, and around 5% of Derwent London’s portfolio. However, as much as flexibility and co-working is an important part of the market, tenants still like to have their own front door and to stamp their own identity on their space. That is why in many of our multilet buildings, floors can look and feel very different. We embrace and support this diversity and provide different, individual solutions. Diverse requirements We have been lucky enough to secure some exciting international growth companies as part of our tenant mix since the Brexit vote, achieving £100m of new rent, and we continue to see  strong demand for space. But what are going to be the drivers for keeping strong interest in London’s space in the future? It is not just about efficient space. For us, it is also about amenities, sustainability, wellbeing and technology. Sustainability is an area we in the industry should be looking at more closely, along with social impact and best governance. Last year, we created a Responsible Business Committee incorporating all these aspects. But we are not embracing change because we have to – it is because we want to. It is high on our agenda, and has been for some time. London is a remarkable and adaptable city. People want to be in London – it is more than just financials. It is also about the tech and creative industries, and in all those areas occupier demand has held up well. With a population of around 8.8m and more than one third of London’s population born outside the UK, the city has a rare level of ethnic and cultural diversity. That provides an extraordinary platform from which to lead into the future as we think about sustainability and well-being for the 6m people in jobs in London. A recent example of this is our White Collar Factory at Old Street roundabout. It is the product of seven years’ research with AHMM, Arup and AKT II, which worked to understand what today’s occupiers require and what we should be thinking about for the future. It has efficient climate control incorporating concrete core cooling, extra bike spaces and a running track on the 16th floor. The office space was largely prelet at the time of completion to a wide range of occupiers including Adobe, Box.com, Capital One and TOG. The latter occupies three floors and provides amenity to the building’s occupiers, as well as other customers. [caption id="attachment_983703" align="aligncenter" width="847"] Google’s HQ in Covent Garden, WC2[/caption] Building for the future The new world will continue to be fluid. London is already responding, with new campuses under construction for Amazon, Apple, Facebook and Google, with the highest level of serviced office provision in the world and increasingly focused on sustainability. It is important the property industry continues to provide the spaces that people are looking for in the areas they want to be, while at the same time ensuring new schemes minimise disruption and environmental damage and provide long-term sustainable benefits to users and local communities. We can learn a lot from other parts of the world as we support London’s growth. The aim is to bring our buildings and people forward in a responsible way for future generations. Paul Williams is chief executive of Derwent London Google HQ image: Penson/Shutterstock