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Office space shortage resulting in growing FM challenges

29 May 2018

Lack of regional office space is placing pressure on FMs to keep them in the best working order, due to the shortage of alternative facilities in many areas.

Bristol has been identified as one of the areas illustrating this trend, with just 0.5% of its total office space identified as vacant.

Local businesses wishing to rent office space in cities including Birmingham, Cardiff, Edinburgh and Manchester are able to choose from less than 2% of the total space in these areas, according to JLL.

The shortage is attributed to lack of development finance, higher construction costs and "a wave of conversion projects", turning offices into accommodation or leisure facilities, according to Kames Capital.

The company has also identified the trend for increasing rents, driven by the shortage of available space, with returns on investment reaching 4.93% for those investing in regional offices, compared with a figure of 3.16% for returns from offices in London.

According to Knight Frank, demand for commercial office space is at its highest for 18 years, placing further pressure on the market.

FMs seeking to relocate their office facilities are advised to plan well in advance to identify the options available in their chosen area.

Although mixed-use development has become more prominent in recent years, typically including office, accommodation and retail premises in a single development, this has not been sufficient to meet the current demand.

The shortage is therefore seen as increasingly likely to drive the move for offices to create more agile working environments, reducing the total area of desking by allowing workers to choose from a number of options, including working from home more regularly.

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