Year in review: The office market magistrate

One of my favourite television programmes of all time is Chris Morris’ The Day Today. Fellow enthusiasts of this seminal early 90s satire may remember a scene in which the news anchor and “crisis correspondent” Spartacus Mills are discussing the sensational breaking story that a fight had broken out between John Major and the Queen. At the end of the segment, they are pushed for time so Mills is asked to summarise the events with a sound – to which he replies with an incoherent “BEEUEUEUEUEUR”. When I first thought about reviewing 2020, that sound is what immediately played in my head before any coherent, analytical thoughts came to mind. Some might feel that it is a perfectly applicable summation of an incredibly strange and challenging 12 months – but, fortunately, some words have also come to me, and I find myself wanting to begin this piece by drawing on a new experience of mine which came this year. I was privileged enough to be included in the judging panel for the EG Awards which, of course, celebrates the best of real estate. It made me realise more deeply that although analysing and effectively communicating data is important to help with market understanding and propelling progress, it can often reduce significant achievements (whether done by an individual person or business) to merely a point on a graph, or a figure in a table. Looking through the entries detailing how companies had, for example, developed smarter ways of working through technology, or pushed to disrupt established market leaders, or expanded global operations, or embraced sustainable practices despite challenging circumstances gave me an admiration for the sector that was different to that which I had felt hitherto and, I feel, will resonate more strongly as time goes on. Sustainability Speaking of sustainability, it was on that front that the year began for me in a research capacity, fusing EPC accreditations with rental data on London offices to provide some quantitative evidence that occupiers are in fact treating environmental considerations as a significant consideration when selecting premises. The analysis gave weight to the notion that improving commercial performance and green credentials go hand-in-hand – something EG will continue to monitor as the nation attempts to “build back better” during the period of recovery. In parallel with sustainability, a significant aspect of the country’s economic rebound will be in assessing how the increase in distributed work impacts productivity. Our report, Real estate in the 2020s – a catalyst for recovery, looked closely at some of the ways in which the commercial real estate sector can help to impact the nation’s output in a positive way – and the importance of improved landlord-tenant relationships to enable more optimal use of physical space. The role of the office Office space in particular has been relentlessly under the microscope this year, with even the very necessity of a communal headquarters being questioned off the back of enforced remote working; but one notable silver lining is that the sector is now far more prominent in public discourse than it has been in the past. As such, there is an opportunity to clearly (and loudly) demonstrate the intrinsic role that communal physical office space plays in supporting collaboration, enhancing company culture and bolstering productivity. While 2020 has accelerated the move to a more distributed form of work, the reality is that, even before the pandemic, the long-term evolution of Britain’s knowledge economy meant that the segmentation of workplaces by individual companies was already at hand, as mentioned in the British Council for Offices’ 2018 report into density and utilisation: “Agile organisations are increasingly staffed by knowledge workers who have greater control over their work; who are more independent of ‘place’, and who are driven less by status and hierarchy than in the past. Such workers spend less time working on the same set of tasks, in one place, simultaneously with the same set of colleagues.” This statement is even more true two years on, and the fluid nature of individual work it describes will have significant impacts on the wider real estate ecosystem. Our September report into shifts in white collar working patterns looked into what those might be, outlining how some dormant residential markets could blossom, identifying the areas of the country most likely to enjoy benefits from a longer-term retention of remote working; and the triumvirate approach to workplace segmentation we are likely to see moving forward. There is a lot of pressure on next year to simply be less harrowing than its predecessor – but even as a natural pessimist I have every faith that it will be; and at the end of it I genuinely believe at the very least that I won’t need to hurdle over the memory of any 1990s satirical news programme in order to adequately conduct a review.   To send feedback, e-mail graham.shone@egi.co.uk or tweet @GShoneEG or @estatesgazette