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Overcoming office void space
November 4, 2019
Take a drive around any of the nation’s many business parks and industrial estates and it wouldn’t be uncommon for you to see empty offices known as void space.
The causes of these empty office spaces are many and varied but range from property not being refurbished (or being poorly refurbished) to businesses simply requiring more smaller, agile spaces and less larger, inflexible spaces.
So how big an issue is void space?
Many commercial estate agents report the office rental market as buoyant. But, when it comes to properties in need of new tenants, called Void Space, international property experts Cushman Wakefield in their most recent United Kingdom Office Snapshot report, calculated that the take-up of office space in the nation’s regions fell by 26% quarter-on-quarter and is 19% below the five-year quarterly average.
Another factor to take into consideration in the Thames Valley, South East and beyond is the continued magnetic pull of the Capital. Over four fifths (81%) of respondents in a recent Confederation of British Industry (CBI) survey believed the city remained an attractive place for UK business. While a 2019 report by think tank Centre for London showed London was ranked top in a list of global destinations for multinational headquarters
Breathing new life into those dead spaces
We are currently working in partnership with proactive owners, asset managers and landlords to help them overcome their void space challenges.
Whether it’s a small parcel of under-utilised space, entire floors or the whole building which is empty, there are ways void spaces can be successfully let to benefit both landlords and businesses looking for a more flexible, agile rental opportunity.
In fact, we’re already helping clients to do achieve this aim in two distinct ways…
Solution 1: Overcoming ‘white box’ syndrome
Housebuilders successfully sell almost identikit homes on new developments with decorated and furnished show homes that demonstrate a property’s potential and lifestyle benefits. These show homes are both inspirational and aspirational.
Now imagine you’re the executive team of a dynamic enterprise looking for new office space. You’ll probably view lots of ‘white box’ property opportunities. The trouble is, while these have in all likelihood been refurbished, they can look very bland as they are all fitted out in a similar way – shiny, raised access flooring, white walls and white ceilings. As a result, potential tenants find it hard to visualise what it could look like as a fitted space with them in occupation.
However, we’re working closely with property owners, landlords and asset managers to help them ‘turbo charge’ their chances of letting empty spaces with a CAT A+ overhaul. The options include a rapid refresh, total office redesign and refit or creating a complete ‘plug and play’ solution for in-coming tenants.
With creative repositioning, your typical bland ‘white box’ can become an inspirational and aspirational workspace for enterprise owners and their people.
Solution 2: Make your spaces smaller to make business sense
For many of today’s workers their office is wherever they can connect to WiFi. Understandably then their employers are reluctant to buy into thousands of square feet of office space they may never need or use.
There’s also another squeeze on the take up of larger spaces – the rise of serviced offices and sector disruptors like WeWork. By 2018, WeWork managed over 4 million square metres of space in more than 30 countries.
(Note that WeWork’s recent and much publicised travails – they’ve removed their talisman and founder Adam Neumann from the CEO’s seat while the Japanese investment company Softbank has had to inject a total of $9.5bn into the company, $5bn of which is debt – could present some interesting opportunities for owners, landlords and asset managers to let smaller or shared spaces!)
But it’s not just the size of the available office space, it’s the length of the leases on it. ‘Conventional’ leases ranging from three to 25 years in length simply don’t work for the modern, lean enterprise. With their business models based on digital and mobile technologies their people can work just about anywhere, from home to a hot desk. As a result, they’re seeking smaller, more flexible, versatile and agile workspaces.
As if to reinforce the point, Vail Williams recently reported that demand for office units over 5,000 sq ft in central London (the typical size office space a small to medium sized business would lease) has fallen by at least 60% in the last year.
So we’re helping clients to fill their void space by redesigning larger spaces into smaller ones, sometimes created around a central hub, to provide the flexible, agile and cost effective workspace today’s businesses need. The hub can offer a wide range of shared facilities, from kitchen to breakout, relaxation and meeting spaces.
These resultant ‘hybrid’ style office spaces – especially with more flexible, shorter lease terms – provide tenants with genuine versatility. They can organise and operate as they choose, from open plan or cubicle working to hot-desking, with all the connectivity, functionality and productivity they need designed in. Their people can collaborate when they want to and find peace and quiet when they don’t.
The benefits of reimagining void space add up
For property owners, asset managers or landlords, the advantages of a CAT A+ refresh, or creating smaller workspaces from larger ones, range from void periods and the costs associated with them being reduced, to rental premiums being increased.
So to avoid rental voids, landlords, owners and asset managers should think outside the ‘white box’ and apply creative solutions to the problem. Here at CBS, we have a proven track of helping clients to do just that.
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