What London’s offices will look like in 2030

FUTURE OF LONDON: panellists at the Future of London event, hosted by EG at the Printworks in Canada Water, SE16, debated how London will do business in the future, and looked at what may be in store for real estate in the capital.  Conventional and serviced providers will become the same Shaun Simons, director of London City fringe offices at Colliers International, said that providers of both conventional offices and serviced office space will cease to exist as separate categories, as the overlap between the two widens. He said: “The changes we have seen in the past five years will be minuscule compared with the changes we’ll see in the next 10 years.  “Historically, you are either an operator, providing conventional space, or one offering serviced space, but today those lines are blurred.” He noted that the conventional landlord has had to “fight back” against rising competition from the serviced office market to provide more flexible spaces, shorter leases and lower barriers to entry. In this “power struggle”, the serviced office has adjusted to let tenants take up whole floors. “Where this eventually will end up is a place whereby ‘conventional’ and ‘serviced’ will be names of the past,” Simons predicted. “They will effectively, in the future, offer the same thing.” Simons added that the agency community will see “massive consolidation”: “This is the beginning of a much bigger picture that will unfold,” he said. The occupiers will have final say Martin Wallace, head of leasing at Brookfield Office Properties, said: “Ultimately, the occupiers, and therefore employees within those spaces, will dictate how London [evolves].  “There needs to be more on offer on the doorsteps of buildings. If Google or Amazon want to do something, they will. They are big enough.  “It is about providing a platform for choice, and that needs to go through planning systems, highway systems and roads. Occupiers will [be a] greater influence more than any landlords or developers. We are there to facilitate what might be happening at the time and future-proof buildings with volume, but at the end of the day, the users will dictate.” More communities Mary Finnigan, head of transactions, real estate EMEA and Australia at WeWork, said the key issue to work towards was “not just about space” but what was on offer in addition to it. “At WeWork we offer access to a community through both our physical and digital platforms,” she explained.  “The key feedback we get from our members is that it is important to have access to [other] businesses in the community, and to have the ability to leverage and and expand these relationships by having that access. That is the future.” She added that WeWork’s larger enterprise members, which account for 30% of the business, require access to WeWork’s desks in other major cities such as New York, Hong Kong and Shanghai. How ways of working have changed James Goldsmith, head of leasing at AXA IM, explained that 50% of all workers would be part of the gig economy within the next five years, reflecting how smaller and more agile companies were reaching the market more quickly because of AI and the internet. This, in turn, had amplified the need for adaptability in the future. “Our view is that the best investments are the buildings people want to be in and those that attract the most diverse occupiers over the longest period of time,” Goldsmith said. “This means creating communities in which different businesses can work together.” Tech calling Natalie Lelliott, director at Colliers International, noted that while banking and finance has been prominent, the huge rise of the TMT sector and flexible workspaces will shape the future.  She pointed to Google, Facebook, Amazon and Apple, which have collectively taken up 4.6m sq ft of office space in the past decade. “No one could have predicted that these businesses would have experienced such an explosive rate of growth over the past 10 years,” she said. The City has also hosted a new wave of occupiers – in particular, the “unicorn” start-ups valued at $1bn or more. These include digital banking company Revolut, food delivery service Deliveroo and tech firm Improbable. Subsectors such as life sciences have also emerged and have created campuses in the City.  Lelliott said: “It is exciting to think that some of the largest occupiers in 2030 might not even be founded today.” Catering to the work communities of the future The speakers also shared their thoughts on how they would adapt to the changing needs of London’s occupiers to do business. Roger Thornton, partner at Maples Teesdale, said: “What we are seeing with our corporate occupier [client base] is, they want a diversity of types of space, not just one form of space, because you have multi-generations working together. “This will probably get wider as the working population becomes older and people will have to work longer.” To send feedback, e-mail pui-guan.man@egi.co.uk or tweet @PuiGuanM or @estatesgazette