Yesterday morning Forsters' Occupiers team attended the launch event of Knight Frank's M25 and SE Office Report: The Next Chapter 2021. In case you missed it, here are my key takeaways:
It should come as no surprise that ESG was a key talking point.
With more and more businesses committing to a net-zero carbon future, the ESG credentials of buildings are going to attract ever greater scrutiny. Landlords and developers need to think about how they can demonstrate their green credentials to potential occupiers, who are increasingly required to demonstrate this to their stake-holders. Having the right accreditations will be key in attracting occupiers (and maintaining rent levels).
Green finance and sustainability-linked loans are on the rise. Occupiers without a strong ESG profile may find that they are seen as a credit risk and can only access finance at uncompetitive rates. For many companies real estate can comprise a large part of their carbon overhead (the vast majority for some professional services firms). The environmental impact of premises will therefore become a key factor in whether or not businesses can access debt and therefore a key factor when selecting new premises.
The importance of connectivity is nothing new, but Covid has put this front and centre in having a workplace that can attract and retain the best talent. Having a best in class building, with fibre and mobile connectivity, will therefore become critical for both landlords and tenants. Proximity to data centres is also crucial, especially for businesses which rely on low latency for competitive advantage.
It is not just about data and power, but also physical connectivity, such as road and rail. Crossrail - when it opens - will have a major impact on east-west travel and may see those areas which it serves become more attractive to occupiers.
The top three areas in the M25 connectivity index were: Chiswick, Richmond and Wimbledon.
Life Sciences attracted much attention in the presentation as a potential growth sector. With greater on-shoring being muted following the pandemic, this is certainly an area to watch.
Life Sciences rely on innovation which requires the seamless integration of people and technology, so proximity of talent, specialist facilities, knowledge centres and NHS sites are key factors in creating critical mass. Outside of the traditional hubs of Oxford and Cambridge, west London and Stevenage were both highlighted.
A copy of the report can be downloaded here.
With the accelerated pace of change comes opportunity. Transformation always follows dislocation