Bottom-line benefits of banishing burnout

HEALTH AND WELLBEING Real estate has a role to play in banishing burnout, and by taking a forward-thinking and creative approach value can be found in the process. A group of workplace visionaries sat in a cosy huddle around a coffee table at the Rail House Café in London’s Victoria. Lit with daylight, its décor was pared-back industrial with corrugated metal ceilings, exposed beams and a saloon-style bar. The din of the city was barely audible outside. Inside it was chilled out, relaxed, a refuge from time. It is part of the thoughtfully-curated retail and leisure offering surrounding Land Securities’ Nova development. A perfect place for a caffeine pause before the gurus, who had assembled for an EG round table on the future of workplace wellbeing, would go about the hectic day that inevitably lay ahead of them. “There is no work/life balance anymore,” said Landid director Chris Hiatt, raising the fundamental point that has put workplace wellbeing and the role of the real estate industry near the top of the property agenda. According to the mental health charity Mind, work-related mental ill health costs the UK economy up to £26bn every year through lost working days, staff turnover and lower productivity. In recognition of this, mindful employers have taken the lead on creating appropriate office fit outs and by integrating wellness programmes. But how far should the role of the real estate industry extend? What workers want Charlie Green, co-chief executive of co-working operator The Office Group, said the company’s co-working spaces were devised by responding to, as well as anticipating, what workers want. He added that it was a developer’s responsibility to create an environment “which is much more than work”. Simon Allford, co-founder and director of architecture firm Allford Hall Monaghan Morris – and the design brains behind Derwent’s coveted workplaces the Angel Building, White Collar Factory and the Tea Building, a retrofitted warehouse, once described as a “white collar funhouse” – said a building should allow a company’s innovative culture to come through, but also engage with the city around it. “While tech isolates us, buildings are about bringing people together. They can have great energy, just like a city, and rather than focus too much on the fit-out, we should think of the building as a social promenade. The journey into the building is just as important as a commute to work,” he said. “Occupiers don’t really want a blank canvas, they want pieces of the city, retail and leisure within the building, purposeful space and difference which organisations can react to.” Different could be an office in which you enter through a coffee shop, added Hiatt. It is a concept he is considering. “It just feels natural,” he said. Rethinking design Green lamented a lack of thought around design in the office sector (“remarkable as we spend more time in offices than anywhere else”) and called for a change of attitude. However, while elements of the industry are embracing the rapid pace of change in occupier demands, some have a historical approach to development that is harder to shift. Sarah Morley, partner at Charles Russel Speechlys, said there was a challenge in convincing institutional investors and funders that flexibility can be an advantage, to which Deloitte head of occupier advisory Chris Lewis pointed out that the way funds value their portfolios had not changed for 20 years. In a survey of 300 corporate occupiers, landlords, developers, lenders, investors and advisers, the results of which were published in Charles Russell Speechlys The New Real report last November, 68% of occupiers said future leases must be more flexible about co-sharing and subletting space, while 71% said future lease agreements needed to enable tenants to adapt their workplace more freely. This was compared with 66% of landlords who answered the same question. “One of the biggest challenges is generosity,” said Allford. “In the past there has been too much focus on squeezing in an extra floor, but now successful schemes aim to maximise light and ceiling height. These are the projects that last 100 years. A building is a theatre, the rest of it is props. The idea of a big fit-out is gone, tenants need flexibility.” Flexible and forward-thinking The experts agreed on the need for developers to be forward-thinking by creating space that can adapt to occupiers’ needs five years or so down the line when it had come to fruition. “In respect of lease lengths, if you look at something that is five years we are keeping headline rents with this flexibility as people are willing to pay for it,” said Hiatt. Leasing terms aside, how can developers think more intuitively about design? Carissa Kilgour, workplace director at Land Securities, thinks developers are talking to the wrong people from the outset. “It is interesting that decisions about taking space are often led with the head of real estate, but could we be talking to human resources about how we can promote relaxation and reduce stress at the same time?” she said. Or chefs. The Office Group’s Green described how on a research mission to the offices of US tech giants, the culture at Dropbox was very much driven by the chef, supporting a theory that has come about over recent years that property should take influence from the service culture of hospitality and leisure providers.  James Goldsmith, AXA Investment Management’s head of leasing, said a 20,000 sq ft food hall planned for 22 Bishopsgate, which is earmarked to be the City’s tallest tower, sets out to serve the same purpose. “We are also having a gym and relaxation pod, and rather than faceless reception areas, we’re bringing in a human element.” Landid’s Hiatt, who oversees over 600,000 sq ft of speculative office development in London and the Western Corridor, challenged the industry to broaden its scope. Wellness begins from the moment an employee steps outside their front door, he said. “You can’t treat the building in isolation. It’s about the journey from home to work and therefore it’s about a well-connected building and transport links. That’s why we are focusing on building offices where people live.” The issue of housing affordability in London is serving that very idea anyway, he added. So will a developers’ investments in creative design be justified with a monetary return? “It is difficult to prove,” said Green. “But The Office Group has sacrificed roof space to make its building more attractive with roof gardens, for example, and we know from experience and gut feel that this is what occupiers want.” Goldsmith added: “The best investments are where people want to be. They don’t want to be fixed somewhere for 20 years. Investors need to be riskier and occupiers will pay for the flexibility.” If in doubt, think like a millennial, urged Kilgour. “They are less tied to their jobs, they have an openness to technology and they are challenging the status quo. These are the people we’ll be building for down the line.”    The round table was held in partnership with Charles Russell Speechlys and Land Securities To send feedback, e-mail Rebecca.Kent@egi.co.uk or tweet @Writer_RKent or @estatesgazette