好色先生TV

Professionals from across Britain鈥檚 commercial real estate sector packed their bags and headed across the Irish Sea this week for the British Council for Offices鈥� (BCO) 30th conference.  

Roughly 850 were welcomed to Dublin with a drinks reception at the Irish Emigration Museum before settling down to talk about how the sector can navigate the challenges the new post-pandemic normal of high interest and low occupancy. 

Here are 好色先生TV鈥檚 key takeaways from the two-day conference. 

A city transformed 

This was the third BCO conference in the Republic鈥檚 capital since 2006 and the speakers on day one were at pains to emphasise how much had changed since then. Despina Katsikakis, senior vice president of the BCO, contributed to the vision of the Docklands redevelopment more than 20 years ago and marvelled at what had been achieved in the meantime. 鈥淒ublin, with its rich architectural heritage, and its remarkable transformation over the past two decades, serves as the perfect backdrop for our conference this year,鈥� she said. 

In her welcome speech, Davina Saint, director of Ireland鈥檚 National Assets Management Agency, remarked how the docklands had been a 鈥渟lightly bleak鈥� place when she first began working there in the early 2000s, with a general perception that it was not entirely safe. Local workers felt as if they had been 鈥渧isited by a heavenly body鈥� when Marks and Spencer first opened in the area.

Since then, an attractive tax environment has seen the area transformed into a HQ hub, led by financial services and, more recently, big tech. 鈥淧art of the reason for bringing the conference to Dublin was the docklands regeneration and the active role that the government had to align with developers and planning to make that happen,鈥� Katsikakis told 好色先生TV. Grand Canal 鈥� often dubbed Silicon Docks 鈥� now has the highest concentration of European headquarters of high-tech firms, many of which were represented among the site tours organised by the BCO.

>> Five talking points at the BCO鈥檚 2022 conference in Manchester

Visitors were shown around Spencer Place, where a new tower for Salesforce 鈥� its greenest office globally 鈥� is approaching completion. Meanwhile, Meta let attendees (though unfortunately no press) have a look around the site of its first campus outside the US. Its new EMEA headquarters, which will house 6,000 employees when complete, is being delivered over four phases with the support of Turner & Townsend. 

Adjusting to the new normal 

鈥淭he presenteeism fox has been shot,鈥� BCO chief executive Richard Kauntze told 好色先生TV, neatly distilling the post-pandemic new normal. 鈥淒uring the pandemic, businesses saw that the outputs were still coming, and they realised that they should have trusted staff in the first place鈥�.

While most at the conference felt it was too soon to assess the full effects of the pandemic, the occupancy statistics demonstrate clearly that something has changed. The Monday to Friday rate for the first months of 2023 was 29%, according to data from Remit Consulting, with attendance even lower in London and concentrated mostly on the middle three days of the week.

 

Employees have proven during the pandemic that productive work can take place outside the office, and, in a tight labour market, a great deal of power lies with them. This power shift puts the onus on developers and architects to bring their A-game, according to Katsikakis.

People don鈥檛 seem to like mandates. They feel they are being asked to come to do some repetitive type of activity they can better do at home

Andy McBain, Natwest Group

鈥淚f you move to a situation where can choose where you go, you will choose to go to places that inspire you, that make you feel connected to people, that make you feel better at the end of the day than when you arrived,鈥� she says, noting that recent years had seen a 鈥渇light to quality鈥� in the office market.

Ed Thomson, associate director at CO鈥擱E, which is developing some major schemes in London, confirmed this and suggested that high interest rates might actually be benefitting established developers鈥� of high-quality offices by discouraging potential newcomers bringing forward projects, thereby shrinking supply of good stock. 鈥淲e deliver buildings to 2025 that are pre-let. That鈥檚 not by chance, the good quality stuff is resilient to [market trends] and is being pre-let,鈥� he said.

Katsikakis added: 鈥淭here is a bifurcation in the market between high quality offices that deliver inspiring destinations and b-class offices, which are a big part of our building stock. We need to focus as an industry on repurposing a lot of the existing offices, in terms of renovation and changing use, so you will see an adjustment in the market鈥�. PLP partner Mark Kelly agreed, telling 好色先生TV that a lot of this so-called grey space may require a change of use if they cannot be invigorated in other ways. 鈥漌hat I think is challenging is how you innovate for those office buildings that are not quite as high grade and how you create a market and investment around those buildings,鈥� he said.

In the occupiers鈥� panel session, there was an acknowledgement of the challenge faced by firms in attracting employees back. 鈥淧eople don鈥檛 seem to like mandates,鈥� said Andy McBain, head of future workspace and design at the NatWest Group. 鈥淭he general feeling is that they are being asked to come to do some repetitive type of activity that they can better do at home鈥�.

IBM鈥檚 global real estate director Paul Casey took hope in employees鈥� ability to 鈥渟elf-organise鈥�, noting that some people were beginning to come in on Mondays and Fridays in order to take advantage of the generally quieter times 鈥� a trend which could smooth out occupancy levels and help companies assess their requirements and make quicker decisions.

As it stands, though, many occupiers are delaying decision making and taking advantage of short-term solutions to their office needs. 鈥淲e are still in the sphere of influence of Covid, especially smaller scale occupiers are taking a longer time to make decisions because it is still unclear what they should commit to at this point,鈥� Liam Dillon, development manager at MiddleCap, the developer behind Seal House in London, told 好色先生TV.

Work has left the building 

But to a certain extent, Katsikakis said, people need to accept that the role of the office was changing to become just one node within a more distributed workplace. Last year, she told 好色先生TV that she wanted her conference to explore the idea of 鈥渢he ecology of the office鈥� and it was a theme that came up repeatedly across the event. 鈥淲e need to think about the office as a vital part of an ecosystem that blends work and life. It is not just a place you go to,鈥� she said, explaining how big corporates needed to think of the office as a product that 鈥渆mbodies brand and culture鈥� as much as a functional space for employees to complete their work.

[Salesforce] don鈥檛 provide gyms in the building, they don鈥檛 provide food, they actually encourage their employees to use the community

Despina Katsikakis

She gave the example of the new Salesforce Tower, which opened last May. 鈥淭hey as a business take a very specific approach which is they put their building in city centres that provide all amenities their employees want around and near the building,鈥� she said. 鈥淪o, they don鈥檛 provide gyms in the building, they don鈥檛 provide food, they actually encourage their employees to use the community鈥�.

This idea of developers stepping back and letting the community in was raised Kevin Nowlan, chief executive of Irish developer Hibernia, in the developers鈥� panel discussion. At Hibernia鈥檚 Windmill Quarter scheme, they host concerts and art exhibitions throughout the year, with half of the tickets sold within the office community and half given to Ireland鈥檚 biggest music magazine to sell. 鈥淲e realised early on that if you create communal spaces that are really world class then people will pay rent on them communally,鈥� he said. 鈥淲e are now curators鈥�.

In the same discussion, Niall Gaffney, chief executive of IPUT, said it was much easier to achieve this communal atmosphere when offices were embedded into places that people live, rather than segregated in their own dedicated district. 鈥淚t was exposed during the pandemic that areas like [Dublin鈥檚 docklands] were just dead, because you have no one living above offices, no one shopping,鈥� he said. 鈥淵ou are seeing that in American cities in a big way. The one thing we have, whether it鈥檚 in London or in Dublin, we have very interesting cities, historic cities with great urban streetscapes. They are great places to be, whether at work or at play.鈥�

Where this is not already the case, public policy will play a big role, with Katsikakis highlighting the importance of smart zoning and transport policies. 

Next stop, Birmingham

As usual, the conference closed with an address by the BCO鈥檚 junior vice president, who will organise next year鈥檚 conference on his path to taking over the presidency. Peter Crowther, property director at Bruntwood, revealed that 2024鈥檚 host was Europe鈥檚 youngest city, with almost 40% of the population under 25, home to more Michelin stars than any other city outside London, and possessing more canals than Venice.

If that last, rather well-worn factoid didn鈥檛 give it away, 好色先生TV can tell you that the BCO will return to Birmingham in 2024, a decade on from its last visit to the Britain鈥檚 second city. Crowther joked that the city had 鈥渃reated brands that created the fuel for our construction industry 鈥� HP sauce to go on the bacon, sausage and egg sandwiches, Cadburys to follow it up with, then Typhoo tea to wash it down with,鈥� adding that it also had 鈥渟ome of the most exciting office developments鈥� in the country.