If ‘community’ and ‘collaboration’ were two of the most important business buzzwords in 2016, what could this mean for our ever-evolving office spaces in the year ahead?
We’ve looked at everything from rental prices, office space design and work patterns to the changing London landscape to bring you the office trends 2017 has in store.
The continued growth of co-working
There are now more co-working spaces in London than in any other European city, and it’s a work trend that looks set to grow in 2017. International co-working pioneers WeWork are continuing their expansion by planning to more than double their presence in the city – and they’re by no means alone in their ambitious growth plans. Expect co-working and shared office spaces to get even bigger in the capital.
Not content with already reinventing our office experience as a “platform for creators”, the founders of WeWork are also developing their next property venture, by doing the same to our living spaces. WeLive launched in New York City and Washington in 2016 and there are plans to add 68 more buildings over the next two years. Whereas they keep the worlds of living and working separate, things get interesting when we consider some of the companies looking to blend the two.
StartUp Home, founded in 2014, combines co-working space with apartments to create vibrant buildings where members both live and work on-site. The idea is to make it cheaper for London’s talent to live and work in the city. It doesn’t just save on rent either – tenants have access to business accelerator programmes such as mentors, venture capital, pitch hosting competitions as well as to all the co-working facilities you’ve come to expect.
Currently in operation at two locations in London, Greenwich and Whitechapel, there are plans to open a third in 2017 along with expansion into other European cities including Berlin and the US – where the first location is due to open in Philadelphia in March 2017.
For now the most successful examples of co-living/co-working spaces in the capital are those produced by The Collective, founded in 2010, which create “spaces for the creative and ambitious.” The Collective Old Oak, located near Willesden Junction in West London, is the site of the world’s largest co-living/co-working building with a community of over 500 residents. Here work is centred around being part of a genuinely inspiring collaborative community, with flexible hours, varied business support and on-going learning all part and parcel of the experience. Expect this concept to grow in 2017.
The future of London office prices
London’s commercial real estate values have been booming for the past five years. According to data from CBRE London Development, office values in the capital have risen steadily by 88 percent and rents by 44 percent between April 2010 and January 2016.
It’s important to remember, however, that whilst office rents for long-term leases have risen steadily, shared office rents including co-working spaces have risen much less steeply; from £285 monthly-per-desk in December 2013 to £350 in November 2015 according to Hubble data.
Looking to the year ahead, you’ll find conflicting reports on the future of London office prices. The latest cost analysis from Carter Jonas forecasts rent prices for commercial property in 2017 to continue to rise. It’s basing its predictions on the persisting undersupply of vacant office space, office development completion and current demand for office space.
But ask the Wall Street Journal and they’ll tell you office rents are expected to fall in the West End. It says that rents could fall by 10 percent from their peak over the next two years. Whilst it expects the central London market to remain resilient in the wake of the Brexit vote, it expects rental activity below the long-term average, and City rents to decline by around 6 percent from their peak during 2017-2018.
Another factor to consider is the anticipated 2017 Business Rates Revaluation. At revaluation, the government adjusts the value of business rates to reflect the changes in the property market. Usually this is carried out every five years, but 2015’s revaluation was postponed until April 2017. This will undoubtedly have an impact on business rates and increased rental values in the city.
Everyone wants a slice of the start-up action
Start-ups are hot. According to the Centre for Entrepreneurs, more than 200,000 start-ups sprung up in the capital in 2015 alone. As well as driving the growth of London’s burgeoning tech sector, these savvy start-ups are also freshening up corporate culture as a whole. Bringing a wave of new innovators into the city, start-ups have spawned a contemporary culture of their own and established companies want a slice of it.
Leading the way is, of course, Google. Their new £1 billion campus at King’s Cross, which itself only opened in June 2016, will be expanding massively in 2017 to accommodate 3,000 new staff in a brand new purpose built building to add to the 800 engineers that were the first arrivals back in June, and the 2,000 staff that moved in over the rest of the year.
Google’s new offices will break new ground in terms of office space design and adopt the start-up mentality of placing fun firmly ahead of stuffy corporate culture. “Exteriors that look as unusual as the interiors” have been requested by chief executive Larry Page so expect spacious interiors, ‘living’ walls and extensive outdoor recreational facilities in this workspace-come-playground.
As if not to be outdone, Facebook has also recently announced plans to massively expand its operations in London. Work is set to commence on a new flagship Facebook headquarters in 2017 in Fitzrovia, which will bring 500 new employees to the West End. Although not basing themselves in or around Tech City, Facebook are sure to adopt a similar, progressive office culture and spectacular design to their King’s Cross counterparts.
Other longer-established companies that are longing to appear hip and see the start-up aesthetic as a means of reinvigorating existing operations are sure to join the likes of Facebook and Google in setting up new offices in the city.
London’s start-up scene might be synonymous with the tech sector, but an office trend for 2017 could see companies not traditionally associated with central London moving in to access the hottest talent and stay ahead of competitors.
Future London businesses
Looking at Knight Frank’s Global Cities 2017 Report, you can get a sense of the type of work that’s going to grow in the ever-evolving capital:
Scientific R&D – in another case of companies following the talent, Knight Frank predicts the scientific R&D community will increasingly seek to relocate from its traditional out-of-town business parks into the city of London. It’s a sector that requires the freshest talent and brightest young minds to move forward, and London is where this talent pool wants to live and work. Knight Frank cites the established research cluster in Bloomsbury and the Francis Crick Institute’s new life science laboratory at King’s Cross as talent pools to watch. The redevelopment of Euston and King’s Cross will see plenty of vibrant live/work locations springing up in the area too.
Robotics and AI – driverless cars, commercial drones, robotics and AI are all set to be driven forward from within the capital. Computer simulation allows more testing and development to take place in office-type environments, while East London’s continuing regeneration will deliver affordable business space suited to these growing industries.
The death of open plan?
Not quite. A July 2016 survey for the British Council for Offices found that almost half of workers in open-plan offices were dissatisfied with noise levels and showed increasing demand for individual control of temperature and lighting.
Jeremy Myerson, holder of the Helen Hamlyn Chair of Design at the Royal College of Art and a writer on office layout, has highlighted a move towards offices that attempt to combine the privacy and quietness of cubicle offices with the creative egalitarianism of open-plan.
“We’re moving towards what is known in the the trade as activity-based working,” said Myerson in an interview with the Telegraph, “in which people have a range of spaces in which they work.”
Google’s new King’s Cross offices will feature sleep pods, pop-up meeting room pods were unveiled at Clerkenwell Design Week and a sound-insulating new-look office chair was revealed at Milan Design Week. So while open-plan may not be dead, privacy is increasingly in vogue, and you can expect to see a rise in the number of office spaces offering private pods and secluded workspaces where employees can work without interruption.