London,
26
May
2015
|
10:45
Europe/London

Additional 5.1m sq ft of office space required for professional services in London by 2019

Robin Wickham, Executive Director, Central London, CBRE commented
The report highlights the very real tension between rising property costs, competition amongst firms to attract and retain the best talent, and employee satisfaction. Occupiers are under pressure to keep costs down and are continually exploring strategies to use space more efficiently.

Whilst escalating costs are a key challenge facing occupiers, firms are using office space to attract staff with 92% of respondents citing employee satisfaction as a business driver shaping workplace strategy. A total of 55,500 new jobs in the professional services industries are expected by 2019, making the requirement of an effective property strategy even more prevalent, especially as the war for talent heats up.
Robin Wickham, Executive Director, Central London, CBRE commented

92% of firms consider the workspace instrumental in achieving employee satisfaction as war for talent intensifies

Summary

An additional 5.1m sq. ft. of office space will be required by 2019 to accommodate professional services firms in London, according to the latest research from CBRE, the global property advisor. Heightened demand for office space will require firms to adopt pragmatic workplace strategies to fulfil business objectives as 92% of respondents to CBRE’s Professional London survey suggest they use workspace strategy to enhance employee satisfaction, and 83% of firms use it as a means to control costs.

Robin Wickham, Executive Director, Central London, CBRE commented: “The report highlights the very real tension between rising property costs, competition amongst firms to attract and retain the best talent, and employee satisfaction. Occupiers are under pressure to keep costs down and are continually exploring strategies to use space more efficiently.

“Whilst escalating costs are a key challenge facing occupiers, firms are using office space to attract staff with 92% of respondents citing employee satisfaction as a business driver shaping workplace strategy. A total of 55,500 new jobs in the professional services industries are expected by 2019, making the requirement of an effective property strategy even more prevalent, especially as the war for talent heats up.”

Firms are placing greater emphasis on the ‘wellness’ of employees against a backdrop of space intensification. Factors such as technology, and the design and aesthetics of the building and workplace are gaining increasing importance alongside on-site amenities, connectivity and location and lifestyle offerings to aid employee satisfaction.

Wickham continued: “As well as attracting talent, evidence suggests that adoption of ‘wellness’ standards have a positive impact on employee productivity and business performance with 83% of respondents citing workspace strategy as a means of promoting employee effectiveness.

“However, offices will need to be used more efficiently whilst the allocation of desks per person is expected to decrease - increasingly the professional services sector is adopting hot-desking strategies to encourage collaborative working practices and space saving.”

Accountancy and management consultants currently allocate 1.25 people per desk as part of their flexible working arrangements; this is forecast to rise to between 1.5 and 1.75 in the next five years with agile working (including remote working) becoming commonplace.

John Kent, Executive Director, Central London, CBRE commented: “Professional services firms will require the appropriate investment in technology to facilitate this new style of working. Though the costs of adopting the required technology may well be a constraint for some, it should be considered as an essential investment - 82% of respondents stated that technology will be the key enabler to delivering greater collaboration and flexible working solutions whilst intending to increase visibility on social media platforms.”

Increasingly firms require collaborative space to support agile working, with a greater proportion of a company’s space assigned to breakout areas and touchdown space. In addition firms will consider the use of small satellite touchdown offices in key locations for internal and client meetings. For firms following this option, it will be accompanied by a re-location to a lower cost location providing a similar level of amenities. This strategy will go hand in hand with outsourcing – where the recent focus has been around nearshoring in key UK regional cities.

 

About CBRE Group, Inc.

CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2014 revenue). The Company has more than 52,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 370 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.