Here in the Midlands some of the biggest names in the professional services sector, from Tier 1 law firms to major international banks, have been moving out of their larger, heritage offices into serviced office accommodation. Crippling economic headwinds and post-pandemic working habits have compelled a raft of companies to downsize their physical footprint, often to the advantage of the burgeoning serviced office sector.
However, here at NG we believe owners of traditional office accommodation can also benefit from this emerging trend. Despite an increasingly troubled economic picture and the rise in popularity of working from home, when it comes to location professional services companies remain overwhelmingly concerned with prestige, as well as access to their client base. This presents a number of opportunities for owners of commercial property.
How can landlords appeal to professional services firms that want to make a statement about their status within the market whilst putting down a marker and future-proofing their business?
One option would be to mirror the serviced accommodation providers. Perceptions of serviced office schemes have changed radically, and, because of the attention to detail being paid by their owners, they are seen today as some of the best quality office spaces out there. Having your utilities managed, carpets cleaned and security taken care of by a landlord can certainly be beneficial to cash-strapped companies.
It’s also worth noting that serviced office developments are often found in prime city centre locations, making them easily accessible to clients. Serviced office schemes also push the right buttons in terms of flexible working, which has become a primary concern for many businesses in the post-Covid era.
The serviced office scene might not be for everyone, of course. Another option would be to refurbish existing assets in order to appeal directly to the professional services sector. Think hi-tech, ergonomic spaces that put staff and client welfare front and centre. Bringing your assets up to Grade A specification and improving eco-credentials, will certainly appeal to the yen for prestige shared by accountants, investment managers and legal eagles.
Thomas Szymkiw, head of agency at NG, said: “In Nottingham and across the Midlands we have seen some huge companies downsizing and moving into serviced office accommodation. They are doing so largely to cut costs, but the trend is also a reflection of a much-changed working environment in which employees prize greater flexibility.
“Serviced office providers have so far been the biggest beneficiaries of this shift, but that’s not to say there’s a dearth of opportunities elsewhere.
“Landlords sitting on empty office space could invest in refurbishments as a way of appealing to a different audience. Professional services firms tend to place a greater degree of emphasis on high spec office accommodation because their physical presence acts as a marker of status. In many cases we are talking about multi-million-pound businesses, so poorly equipped, inflexible and unwelcoming office spaces simply won’t cut it. Every last detail needs to be high end, and, frankly, professional.
“Serviced office providers are stepping up to the plate in this respect, which explains why so many top companies are going down the serviced route. In the current climate, any commercial landlord who wants to make more out of an unprofitable investment would do well to consider a high-quality refurbishment and offering flexibility to potential tenants. There’s a lot of money flowing into the sector right now, including here in the East Midlands and taking a long-term view, it’s clear that demand for flexible office accommodation is here to stay – so the serviced sector is likely to remain a lucrative one.”
Thomas thinks that the days of professional services firms taking large, statement, often ego-driven offices are well and truly over.
He added: “It’s worth considering just how much office space is occupied by professional services firms across the entire country. Landlords should realise that we are now entering a time where pragmatism rules and repurposing of offices is inevitable and welcome. City centres are changing fast, and there’ll be no prizes for those playing catch-up with the property portfolio.
“At NG we have a wealth of experience in dealing with professional services companies. I would invite any landlord who has their eye on the sector to contact us today to discuss potential ways forward.”
