Home working rise ‘could hit office sales’

The rise in home working may mean companies need less office space.
The rise in home working may mean companies need less office space.
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The rise of home working could have an impact on the commercial property market as companies cut their office space, experts have warned.

Derek Nash, senior partner at Lindsays law firm in Edinburgh, said that, as businesses move towards a flexible or “agile” working space, there is less demand for offices.

Instead, he said, many more may be changed to flexible working hubs, where smaller spaces are rented out on a short-term basis.

Meanwhile it is expected that more companies will embrace “smart offices”, which use sensors to detect which parts of office space are busiest – and can use employees’ diaries to assess demand for space and assign desks.

Mr Nash said: “The driver is companies trying to be modern and to work in an agile way.

“There may be cost benefits for companies in reducing their office space but most companies see it as a better way of working for their staff and a better way of delivering their service to customers.”

In June, a report from Jones Lang Lasalle claimed that demand for flexible office space was set to soar. In Edinburgh, it accounts for around 1.5 per cent of the market.

WeWork recently opened a centre in Edinburgh, where Codebase has been long established as an incubator for start-ups and scaling technology firms.

Mr Nash said: “We are seeing quite a bit of discussion about this in the commercial property market and what the impact may be. You could have a company which has a 20-year traditional lease and they still work in an agile way, but increasingly we are seeing flexible leases which allow people to hot desk.”

He added: “Of course, people might be happy to work from home one day a week, which has been proven to be the ideal, but they also often are keen to still have their own desk, where they can put their cactus and their photographs.”

At the Goldman Sachs headquarters in London, workers are given options about where they work – at unassigned desks, private rooms and informal hangouts. Meanwhile even the bank’s partners occupy offices which can be used as meeting rooms when they are away.

Mark Catchlove, of office design firm Herman Miller Insights, pointed out that property is the second biggest cost for a company, after staffing. Its research recently found that being able to work from home occasionally was the priority in terms of office preferences.

Mr Catchlove said: “The size of occupation of offices is inevitably smaller but it is continually changing. There isn’t a one size fits all and it really does vary. The biggest thing that is happening is choice and that is where flexible working comes in.”

The comments come as it emerged that investment in London office properties fell by more than a third in the first half of 2019 and an £850 million deal for a landmark office space in the city near Waterloo fell through.