Out of Town Office Space is in strong Demand

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Agents are seeing an increase in inquiries for out-of-town offices which have adequate car parking and social distancing space within.

Covid-19 is forcing a re-think on the ways people will continue to work in office environments when city centre offices present several difficulties: getting to work on mass public transport, and hundreds or even thousands of staff in high rise blocks where lifts have very limited capacity.

Currently, most office staff are homeworking or working flexibly, with a small core team working in the office. But as things start to move towards normality, and teams need to meet face to face, at least occasionally, the prospect of an out-of-town or regional office becomes more attractive.

If this becomes a trend it will certainly please those landlords who have vacant out-of-town office space, and it will create much sought after demand in what has been a lean time for this type of space of late.

Jonathan Ratcliffe from Office Agency Offices.co.uk says:

“I wouldn’t say people are deserting cities, but what we are seeing is a clear short-term spike in interest in office sites with car parking and smaller private office suites, it’ll be interesting to see if this continues into the medium-term”.

The Post-Covid office market is likely to be quite different to what it was before, depending how long the precautions need to go on. City centres are like ghost towns right now, with not just empty office buildings, but empty sandwich bars, cafes, restaurants, trains, trams and tubes.

Most service industries have adapted well to home and flexible working and are content to allow their staff to continue this flexibility, depending on individual circumstances. For example, at-risk families and those who need to use public transport will be accommodated. It is likely that an element of this may become permanent, but there will still be a need for teams to come together, so a smaller out-of-town office could be just the right solution for some companies.

Out-of-town sites are usually on the outskirts of a town with good transport links, they often enjoy more green space and are ideal for those who can drive to work.

Mr Ratcliffe explains:

“City centres are usually extremely poor for car parking, so if you are travelling by car to work, as we all are currently, you want to a direct commute and a car parking space. People are actively avoiding other people on public transport. Car parking is the key feature tenants are asking for now.”

There is almost certainly going to be a reduction in the demand for large physical office space in town and city centres. Several CEOs of large corporations have already indicated that they will be having a serious re-think about housing thousand of staff in city centre Leviathan offices in the future.

Technology has taken on a new significance, so travel, regionally, nationally and internationally is likely to be in for a huge reduction as people get familiar with the technology of remote working and digital communication. Consequently, the availability of Megabit Broadband will in future be a major determinant of the suitability of out-of-town office space.

Mr Radcliffe cites Manchester as an example, having plenty of choice of city centre office spaces, but it’s the options on the outskirts where the current demand lies, he says. Areas such as Old Trafford and Salford Quays, which both enjoy superb transport links, cheaper desk prices and more open space were the “go-to” areas over the past month.

Conor Shields the Area Manager for IWG plc in Manchester says:

“We’ve closed out June with a record-breaking month for: number of tours, number of enquiries and the number of deals signed for Regus Manchester Trafford Park and Regus Salford Quays Digital World. What we do know is the market is back, businesses are leaning towards more flexible working solutions now more than ever”

In Newcastle, recruitment firm NRG has signed an out of town lease at the Quorum Office Park located 4 miles from Newcastle City Centre, with great transport links to the A1 and A19.

Therese Liddle, CEO at NRG explains,

“The City Centre was a great place for NRG for many years but as we grow and offer clients more agile solutions identified even before the Covid19 crisis a shift in the way businesses recruit. The NEON building perfectly complements our brand and vision, allowing us to drive our business forward and facilitate our next phase of growth, while giving our teams a brilliant vibrant place to work.”

Large corporates are also looking outside of City centres, with trends such as “Hub-and-Spoke” – a city centre HQ with supporting flexible hubs in the suburbs, demonstrating a trend away from busy cities turbo-charged by the Covid panic.

“City centres are in a quandary, we know once a vaccine has been developed and the fear has gone that they will once again thrive, but for now it’s all about cars and smaller private offices for those wanting to get back to work”, concludes Jonathan Ratcliffe.

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