Event Summary

Offices + Workspace | Photos and summary

16 October 2024 09:26 Suzanne Elsworth Comments (0)

Is the office market like a Halloween zombie being raised from the dead? Could new government workplace legislation be a nail in its coffin? Or are the horrors of the Covid work-from-home era about to be destroyed as rents soar? The autumn mood definitely favoured the third option at the Offices and Workspace Update.

The event was sponsored by Yardi, TSK, and Civic Engineers.

Scroll to the bottom of the story for the event photo gallery.

Prime position

Headline rents in Manchester city centre hit £44/sq ft at No1 St Michaels, according to Joe Rigby, managing director for the North at CBRE. Rigby said rents were “rocketing” with a 43% increase in the last 10 years. He’s forecasting they will reach £55/sq ft-£60/sq ft by 2027.

He said take-ups were at a 10-year average of 1,240,000 sq ft, with 510,885 sq ft in the first half of this year. He predicted “I have a gut feeling towards the end of the year, we will get through that total.

“Location is really important and the main focus is [Manchester’s] central assets, though the caveat to that is if you are technology or innovation-led.”

Topping his “hotspots”, in terms of the number of transactions, are the Central Business District, the Northern Quarter and Ancoats, and Piccadilly Gateway. St Peters Square and the Cathedral Quarter sitting at the bottom of that list.

Want to see Rigby’s slides? Contact him directly for a copy by emailing joseph.rigby@cbre.com.

CBRE’s Joe Rigby estimates that headline rents could increase to £55/sq ft-£60/sq ft by 2027. Credit: Place North

More optimism

Rigby’s positivity was echoed by other panellists.

Philip Scott, fund manager and head of Manchester at Schroders Capital, said “There is a definite uptake in investor sentiment for offices. The challenge is there isn’t the real ‘trophy asset’ we are all searching for, so it goes back to microlocation. Pension funds will hang on to their best stock – so it’s the best, then it’s the rest. It comes back to what it is going to cost to get there, and how do we underwrite our exit?”

Shedkm’s Mark Sidebotham, Capital&Centric’s Sabine Dunstan, Crookes Walker’s Andy Ringland, Wigan Council’s Aidan Thatcher, and Civic Engineers’ Dan Podesta made up the first panel of the day. Credit: Place North

Creating a new Civic

An audience poll by event host Julia Hatmaker, editor of Place North West, showed 92% of participants said there was definitely space in the market for retrofitting offices, while the remainder said they thought this was only true of the lower end of the price point.

That backed up the actions of the team managing the transformation of Wigan’s former Civic Centre – now known just as Civic – who are in the process of resurrecting the concrete Brutalist landmark, due for completion next summer.

Aidan Thatcher, director of place at Wigan Council, said: “It’s a really important part of our town centre regeneration. It’s our strategy to bring footfall back into town. With all of the other schemes going on, it will make it a destination; not to compete with Manchester city centre, but an alternative option with really good office space, really good accommodation and amenities, all on your doorstep.”

Sabine Dunstan, development manager for Capital&Centric, described delivering market-leading grade A workspace with “unrivalled” amenities like a gym studio, “mini cine” and roof terrace. She added: “It’s about creating somewhere that allows start-ups and SMEs to grow. Alongside delivering the scheme itself there is going to be a whole programme of business support and expertise.”

Capital&Centric is transforming the 1970s office block into modern workspaces. Credit: via Font Comms

Dan Podesta, associate director at Civic Engineers, detailed weather-related chemical issues with the original concrete frame and said his team’s role focused on a “repair strategy”: “We wrapped the building which provides that added level of durability.”

He also discussed the historic “waffle slab” design, and added: “It’s not something we see at the moment but it’s something we are going through with a client to try to convince them to adopt a waffle slab in a new build. It’s an efficient form of structure which will reduce embodied carbon compared to its competitors.”

Mark Sidebotham, practice director at architectural firm Shedkm, said Civic’s façade would be enhanced, with elements like the original windows being retained with added double and triple glazing.

Responding to comments the building is “ugly”, he said: “Good design should not sit on the fence. Something that sits on the fence is boring. This creates discussion. This building has a history and the internal programme has to work with what the community wants. You’ve got to go beyond the building, it’s about how it sits in the local environment.”

Andy Ringland, chief technical officer and Manchester lead at Crookes Walker Consulting, detailed the challenges of putting in energy-efficient technologies and getting the right light spread amid height constraints, putting in “better than the minimum” insulation which changed the internal area, and using natural ventilation as far as possible, all while considering the building’s embodied carbon.

He added: “You need to understand what you are dealing with before you set off. We needed to understand what condition everything was in and how leaky the building was so we undertook air permeability testing, and a smoke test which told us where the problems were.”

The second panel of the day included HBD’s Lee Treanor, CBRE’s Joe Rigby, Schroders Capital’s Philip Scott, Savills’ Jay Patel, and Colony’s Georgia-Kaye Berry. Credit: Place North

Working in teams, or on Teams?

On the day the government announced its new employment rights bill, there were mixed opinions from panellists about the work-from-home issue.

Lee Treanor, director at HBD, said organisations were still trying to work this out, post-Covid: “They want to attract staff back into the office, not drag them back. People want to come back in for different reasons, like training or social, not day-to-day tasks. For now, I can’t see that significantly changing.”

Rigby added that it “boiled down to culture and innovation”. He said he was seeing the under-30s wanting to be in the office to learn, and said more experienced team members “need to be in and nurturing this talent”.

Meanwhile, Helen Hodgkinson, chief people officer at law firm TLT, advised against mandating the number of days employees should be in the office: “You want people to be there because they want to be there.”

An audience poll asked what about the “greatest enemy to the office market today”, with 42% saying it was changing work patterns.

Georgia-Kaye Berry, head of sales at Colony, said: “As a workspace operator, we constantly have to tailor our product. When Colony started it was coworking, but after Covid, people said ‘We want to grow, we need bigger offices’ so we went to our landlords and took more space.”

.Jay Patel, director of planning for the North at Savills, added: “From a planning perspective, it’s what’s going to happen to your secondary and tertiary office stock. Clearly there’s a demand for shiny new offices and historic buildings in great locations, but it’s the out-of-centre stock that’s the interesting challenge for me.

“In the post-Covid era, people are starting to appreciate more local locations, not just the major centres.”

Danielle Adler, senior workplace consultant at TSK, said: “What can we do to incentivise and naturally encourage people? For me, it’s moments of connection.”

Looking up – and out

Asked about the facilities which put office space in demand, Berry said a well-designed usable roof terrace was the hot property – something Rigby agreed with.

Continuing that outdoor theme, Patel said good public realm was received positively by local authorities, with a focus on both the look and feel of a building.

The third panel of the day featured TSK’s Danielle Adler, TLT’s Helen Hodgkinson, GPA’s Dominic Brankin, and Avison Young’s Chris Cheap. Credit: Place North

Unlocking productivity

Good “tidiness, toilets, and teapoints” are key requirements for productivity, according to Dominic Brankin, property director at the Government Property Agency, as are ways of handling “noise levels, privacy, and acoustics”.

Brankin also said it was vital to create a sense of community: “Then people are more likely to thrive at work.”

Adler said workplace design needed a “variety of settings” and added: “You get used to your own home environment and when you come into the office the experience can be overwhelming. It’s about making sure people have choices and using spaces flexibly.”

Chris Cheap, principal and managing director of transactions for Avison Young, said: “The engagement is everything for me. We need to shake out of the appointment-driven culture and have ‘happy accident’ conversations again.

“People are central to everything and, post-Covid, people being central to property decisions is now a given. Authenticity is really important.”

The increasing awareness of the needs of neurodivergent employees was a point mentioned several times. Cheap said: “One sector moving quickly is property management. To create an experience from ‘the street to the suite’ you have to continue that journey throughout the building.”

Hodgkinson added: “It’s about sight and touch. Your ability to change the environment to suit your team is massively important and it’s not just the workplace, it’s about colleagues. It has to come as an entire package.”