New data from Quotezone.co.uk, a leading price comparison platform, shows that demand for office space has made a partial U-turn in the first five months of this year, following a sharp decline during the height of the pandemic. The research, which is based on a sample of over 10,000 commercial property insurance policies, reveals an 18% increase in demand for office space in the first five months of 2021 compared to the same period last year.
Lockdowns and ‘work from home’ orders during the pandemic saw many offices left empty as millions of workers worked from home, changing the commercial landscape of work and city life dramatically during the course of 2020.
While some employers have indicated that they plan to make working from home a more permanent arrangement, Quotezone.co.uk’s latest findings reveal that many other businesses are continuing to seek out new office space for their workforce.
Swiss bank UBS stated last week that they would look at hybrid workplace/home solutions in the future, but right now WFH is the default setting. A BBC survey in May found that most employers were considering 2-3 day weeks in the office, with many offering a case-by-case approach to staff, since WFH suits those with dependents better than singletons.
The UK public sector is naturally not so keen on a return to the office, where most admin staff remain at home and many GP surgeries and public buildings remain closed. Anyone with Covid 19 symtoms is advised to self isolate as a matter of routine across the public sector. Schools are being closed when just one pupil tests positive, despite the PCR tests being proven to be unreliable and often badly handled during the lab processing.
According the mainstream UK news outlets the government is considering giving all workers the right to WFH, by law, with a new piece of legislation being passed later in 2021. It could happen – although it isn’t clear how a Firefighter, A&E nurse or refuse collector could actually do their job at home, so in reality, it translates into reduced public services for the same wage bill.
COMMERCIAL SPACE DEMAND IS STILL WEAK
Demand is still well below pre-pandemic levels though, with a year-on-year drop of 49% in 2020 compared to 2019, says Quotezone.
However, the increase is good news for business leaders who want to get employees back into the office, and is also a positive sign for hospitality businesses, many of which rely on footfall in city centres to stay afloat.
Greg Wilson, Founder of Quotezone.co.uk, comments: “For the first time in 18 months our data is showing a step towards returning to pre-pandemic life for office workers. Without a doubt the post-pandemic commercial landscape will be different to life before 2020, but an increase in demand for office space suggests many businesses are embracing a hybrid model of working, which will keep city centres alive while also offering a more balanced work life in the UK.
“However, for businesses taking that step to re-open their offices, it is crucial to remain vigilant with savings. According to Marsh’s recent report, commercial property insurance costs increased by 18% in Q1 of this year, following a 24% increase in Q4 of last year. If businesses do experience an increase when renewing their policy, it’s important they consider switching providers. Now is a challenging time for most businesses so it’s crucial to avoid unnecessary costs wherever possible.”
OFFICE SPACE TO BECOME CO-LIVING SPACE
As IE magazine has reported in the past, the climate change agenda is very much in the driving seat now. The plan is to create super-cities, monitor the population and manage behaviours. In Manchester one co-living apartment block will be 46 storeys high and contain over 1100 people. Build Back Better anyone?
Given the strength of the sustainable/low carbon cities policy in the EU and the UK right now, it is likely the government will encourage developers to convert offices into apartments, especially if some token green spaces and bicycle racks are built at street level to prettify the area. That way you reduce commuter traffic, via reduced office and shop space, plus you cram people into buildings with zero parking and ULEZ tolls for daily trips – so they cannot afford to own cars. Thus you meet your climate agenda CO2 targets. Genius.
It all adds up to a tough time for Commercial insurance brands, although the upside is that the green gravy train offers a wealth of opportunity in regards of e-scooter, contents cover, home business insurance, private healthcare plans, shared car ownership, income protection plans and more, as life becomes more unpredictable and owning stuff is replaced by a rented lifestyle.