The high street is changing. Gone are the days where the adage ‘build it and they will come’ applies to retail. Consumers are increasingly looking for a new and different shopping experience and we have all seen how shops are trying to adapt to the challenge from online retail.
At the same time, this is increasingly the case with office space as well. As I write this, the government has dropped coronavirus ‘plan B’ measures and this easing of Covid restrictions means there will be a return over the coming months to office working for many. That said, the days of 9-5, five days a week for everyone are largely over; taking its place is so-called ‘hybrid working’, where staff come into the office for a certain percentage of time every week and work at home the rest. (Prepare for ‘60/40’ to mentally suggest hybrid working policies rather than a balanced investment strategy over the coming months and years).
Over recent years many organisations have implemented ‘hot desking’ policies, where staff are not allocated a permanent desk which they can adorn with photos of their loved ones but rather they simply find an available space, open up their laptop and start working.
Of course, this has been driven largely by a desire to reduce overheads but the Covid-related changes to working patterns are taking this a step further. With this comes the need to make traditional offices a place where staff feel they can work and collaborate as effectively as they do when they work from home.
Every commercial landlord should be regularly evaluating their properties and assessing whether they are fit for purpose today. This could result in a number of different options being considered, from providing a lick of paint to a slightly tired looking interior or exterior, to completely gutting a space and starting from scratch.
For example, do businesses need as many meeting rooms today as they did previously? It is unlikely as the convenience of video meetings rather than face-to-face has led to many companies continuing to invest in this new technology. This means that offices with fast internet and quiet spaces for video conferencing are increasingly in demand.
At the same time, the drive towards ‘net zero’ and impending changes to improving the energy efficiency of properties means that owners and retailers are having to look at ways of implementing environmental changes to their buildings and facilitating increased use of renewable energy.
Landlords shouldn’t overlook the need to refurbish their properties; rather, they should see it as an opportunity to make their portfolio more attractive to potential tenants and even increase the price per square foot.
Advisers need to be promoting the opportunities in this market. If they have clients looking to purchase commercial property then they need to make sure they don’t just buy space but think about how they can fit it out to attract tenants.
Short-term finance can often be the best option to fund commercial refurbishment work. Once the project is finished, they can then refinance to a term loan or commercial mortgage, based on the improved property value. They should also benefit from reduced void periods and higher rental values. At Alternative Bridging Corporation we offer competitively priced bridging and commercial options to suit all manner of refurbishment projects.
Offices will never go away. We all know people – in fact you may well be one of them – who have yearned to get away from working at home, surrounded by demanding children and to be part of an office culture once again. However, the world is ever-changing and with that there are opportunities to help clients ensure their properties are meeting the needs of today and tomorrow’s businesses.
Jonathan Rubins is director at Alternative Bridging Corporation
