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Relocation, relocation, relocation

25 November 2022

We take a look at the trends and challenges affecting the relocation market...

In March 2020, the way we thought about offices changed overnight. As the Government announced the first lockdown, the office went from being a place to which most employees commuted to every day to being our own homes.

For the UK’s relocation market, this meant that “business as usual” immediately ground to a halt. Instead, the focus shifted to making sure that those organisations that had to remain open met stringent safety regulations, and on creating an “office in a box” for the colleagues now working from home. “It was tough,” recalls Rachel Houghton, Managing Director of relocation experts BMG. “Not only was there a downturn in revenue, but there was an increased need for labour. Everything is a lot slower when you need a gap of two metres between people!” 

Although business picked up as the pandemic receded, the office relocation landscape has not returned to “business as usual”. Instead, there’s a mixed picture in which some organisations have returned to the office, others have adopted a hybrid working pattern, and others still have chosen to work fully remotely. 

“Ten years ago, tenants were fighting for space,” says Dani Stern, Senior Director and Head of Product for the commercial real estate vertical for Honeywell Building Technologies. “Now vacancies are high. Tenants won’t sign long leases. They have requirements that they didn’t have before.”

“Real estate apocalypse”

That said, the “office real estate apocalypse” that was mooted during the pandemic has not happened. The UK continues to attract inward investment, and is often ranked top three for relocation assignments, according to reporting by Relocate Global. Cushman & Wakefield’s Real Estate Movers & Shakers Report 2022, published in June, found that the City of London excelled in attracting firms looking to relocate – a major reason for this being ‘flight to quality’, or firms looking to move to locations that may be more expensive, but where a return on investment is as good as guaranteed. 

‘Flight to quality’ is happening in terms of use of the space, too. “Occupiers are being more discerning by moving towards higher quality office space as an important factor in the push to get people back to using the office as a workplace,” explains Paul McLeman, Consultant with P & I Real Estate.

One significant change is that there’s been a reimagining in the way offices are used.  “It’s much more about ‘how will people use our buildings, how are they going to want to use our buildings?’, and ‘less about how many people we can fit into the buildings?’” says Ms Houghton. Instead, it’s become all about the “colleague experience in the workplace”, and reimagining that so it becomes a more collaborative place. “I think there’s been a realisation that people were lonely, working from home during the pandemic, but that they were really enjoying having some quiet time where they could get their heads down and get things done. We started to see more acoustic hubs being put in, more project tables. There was a big investment into that,” she says.

Home-from-home experience

The home-from-home experience is becoming increasingly important. “For many, the cost-of-living crisis is driving people back to the office as worries about energy bills intensify,” says Paul Eatock, Managing Director of Eatock Design & Build. “It’s therefore important that the office remains a home-from-home experience for all staff members when needed, including having fully fitted kitchens and spaces for relaxation away from the hustle and bustle of office life. That means they will need the capacity to effortlessly accommodate having all or no staff in the office at any given time. Who works where shouldn’t affect day-to-day operations.”

“There’s an expectation now that the office should be like the home experience,” agrees Mr Stern. “People live in smart homes, surrounded by tech. Employers have had to adapt to that to get employees to come into the office.” He points to the growing demand for frictionless access “from home to desk” as one of the ways in which smart tech is transforming the office. “You don’t need a badge to enter a building, you’re identified by biometrics, and you don’t have to call for the elevator, it knows who you are and takes you to your floor,” he says.

Sustainability is also a significant driver in the relocation market. “Workers want to see a degree of care from employers, for both their people and the planet, so office managers will need to show a commitment to sustainability incorporated throughout the office,” Mr Eatock says. “This includes sustainable procurement of office supplies and furniture, plastic reduction and helping support healthier, more planet-friendly ways to travel into the office from their employees.”

He adds: “We’ve seen an increase in demand for showers in offices as a way of encouraging staff to cycle or run into work and freshen up before the working day begins. We expect trends like this to gain momentum throughout 2023 as offices become more flexible and sustainable.”

Reduction in moving

While the relocation market remains buoyant, the focus is shifting. “Moving things is getting less,” Ms Houghton says. “We all have a laptop now, we don’t have as much paperwork, people don’t tend to have their own desk.” Diversification, she says, is key. “It’s always been in our mind that we need to diversify as an organisation, so moving into things like change management, workplace experience, consultancy, space management, occupancy management – just making sure we’re ahead of all those trends. Whether we had the pandemic or not, the world was going that way, that we’re going to move less.”

And, of course, plenty of challenges lie ahead. The country has just slipped into recession – with some forecasts stating this could last two years. This will inevitably have a knock-on effect on relocation, given the possibility of layoffs, and it’s likely some employers will look at remote work as a way of reducing overheads. “Occupiers are remaining resilient and continue with the move towards hybrid working,” Mr McLeman says. “This naturally reduces the amount of space they need and the long-term costs of occupation although they need to provide quality workspace in order to attract and retain the best people.”

“I think there’s a lot of fear, and that in itself is the biggest challenge – to take risks on investment when there’s so much doom and gloom around,” says Ms Houghton. “We’ll probably see a continued level of change over the next year, then a period of stillness where, if the political and financial landscape continues to be uncertain, our clients will become uncertain, and that can be a sticking point. 

In the meantime, she says, there are a “whole host” of reasons why companies choose to relocate, such as introducing new workplace trends – for example, moving from desk settings to agile settings – introducing new technology, or just changing a carpet. “But a lot of it is around growth and consolidation,” she says. “Teams are growing, they need more space, a different department has to give way and the building needs to be restamped, effectively.”

“Sometimes it’s a little bit like Jenga, sometimes it’s a little bit like chess,” she adds. “Sometimes it’s a well-thought-out strategic change, and at other times it’s an urgent need to release some space.”

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