Excl: London’s offices aren’t dead but will continue to feel Covid side effects ‘in immediate future’
Reports of the death of the London office have been greatly exaggerated – but policymakers must step up to ensure workers are encouraged to come to their desks.
That’s the conclusion of a new report from Central London Forward, the partnership representing the city’s 12 central local authorities.
Although the take-up rate of office space in central London plunged by half during Covid, it has since rebounded back to pre-lockdown levels.
However, hybrid working has caused changes to the demand for space – with employers seeking higher quality and more central spaces.
Demand for floor space is set to decline by three to four per cent compared to 2019 levels, but it is likely to recover over the next two decades.
However, the depths of the drop in demand and the pace of the recovery will be dependent on the severity of the economic downturn approaching.
While the value of prime offices is almost back at pre-pandemic levels, so-called ‘secondary’ stock is still down eight per cent.
Demand for space in more peripheral areas has also softened while enthusiasm for space more centrally is relatively robust, the report states.
Office workers must also be able to rely on strong public transport, with TfL and government urged to protect services so commuters are not disincentivized, the research conducted by Arup concluded.
Local authorities must also protect key commercial properties from being converted into other uses while managing a transition of less popular properties to more useful purposes, such as housing, where needed.
Policymakers were also urged to make sure the city’s office stock meets desires for the current age, such as decarbonisation and promoting flexible spaces.
The role played by London offices has changed dramatically since the pandemic, with the area home to 1.5m office jobs when the pandemic struck in 2020.
Spending in the capital’s heartlands plunged by around £1.9bn in the first year of Covid, after home-working.
The commercial officer sector would continue to feel the side effects of Covid “in the immediate future,” according to Arup director, Matthew Dillon.
However, there were “many reasons to feel optimistic” about the long-term prospects,” Dillon added.