Lots of things changed in 2020, and the way we worked from day-to-day was one of the most significant challenges faced by many people and businesses. According to the latest figures from the Office for National Statistics (ONS), the proportion of people working from home has more than doubled in the last year, up to a total of 25.9%.
With more than one in four people working from home, at least for the time being, questions have been raised about how this trend may affect the future of commercial property and city centres in general. In recent years, city centres have been on an incredible upward trajectory – but will this continue in the future if millions of workers are fulfilling their jobs from home and businesses no longer need to maintain as much costly office space as before?
As people begin to head back to offices in greater numbers following the 19th July easing of restrictions, this is a good time to assess how the working from home trend may evolve, and consider what effects this might have on commercial and residential property in city centres.
In the medium-to-long term indications are that it seems unlikely that full remote working will remain the norm. Instead, it seems certain that offices will continue to be a permanent fixture of life, either for full time work or as part of a new hybrid working solution.
This means that the demand for city centre offices is as strong as ever and confidence is high. According to GeraldEve’s National Office Investment Bulletin, total investment volumes for Q2 2021 reached £545m (32 deals) – an increase of 52% on Q1 2020. Of that, the North West accounted for more than a quarter of all deals, with the activity centred on Manchester.
The Manchester Office Agents Forum (MOAF) has noted this week that the city’s office market has stabilised with more than 220,000 sqft of office space was leased in Manchester during Q2 2021. A MOAF spokesperson said that this demonstrates “continued confidence in the market and, having already seen an uptick in enquiries and requirements in Q2, we expect this will translate into an increase in deals in the second half of the year.”
Ashtrom’s purchase of 8 First Street for £82m led the way, and this has since been followed up several other high profile deals in the city. The 81,000 sqft Windmill Green was bought by Trinova Real Estate and Europi Property Group following a £15m refurbishment project.
Elsewhere in the city, confidence is so high in Manchester’s office market that Morgan Capital chose the city as the site of its first UK expansion outside London. Their purchase of the £60m, 150,000 sqft site at New Victoria is another boost for a city that is growing faster and faster all the time.
In the world of construction, the office sector is equally strong and new developments are pushing ahead as fast as ever. For example, in Manchester approximately 1.2 million sqft of office space was completed last year according to the Deloitte Crane Survey and a further 11 major schemes are currently in construction.
With all the above in mind, we do not expect to see city centres empty out, particularly in the UK’s most economically vibrant cities like Manchester and Preston. Consequently, the demand for the highest quality luxury homes is exceptionally strong and likely to remain so.
The latest figures from our sister company, Alliance City Living, demonstrate the extremely high demand in the Manchester city centre residential market, with more people enquiring every week and occupancy figures of properties under their management remaining very high.
In particular, the increasing normality of flexible working, including portions of the week working from home, has impacted the type of properties that are proving to be the most popular. Home office space is more important than ever, making 2-bed apartments the most highly in demand among potential renters and owner-occupiers as the second bedroom adds a crucial element of flexibility for residents.
Other features which are becoming vital for residents are the likes of high speed, reliable internet connections and large windows to make sure that the home is filled with light. Furthermore, the location is very important – with offices remaining and the sector growing faster than ever, there will be no exodus away from city centres, making a city apartment investment the smart choice. Get in touch with our team today to find out more >>