The great reopening is here, and after a quiet summer in London, the place feels busier. Now we have to stand on the train, and there is even an occasional queue in Pret. More importantly, the team here have been doing lettings. We’re not the only ones. Agents across London are reporting that more deals are being done.
What is the secret to success?
Here’s what’s leasing post-lockdown and why:
1. Newly built or newly refurbished
The obvious point is that people like shiny new space, because it’s just better. The less obvious factor is sustainability, which is becoming so important that customers will pay much more for it. New space comes with high EPC and BREEAM ratings; must-have credentials that aren’t possible on older spaces.
2. Great Location
I was working with an environmental company a few years ago. We surveyed the staff to ask if they would travel further to a more sustainable building. 50% said no! This showed me that no matter how great a space is, location still rules over most other factors.
The huge recent lettings to TikTok, Snapchat and Depop show that the City Fringe is still the go-to for tech firms. In our managed portfolio Kings Cross has been popular, with recent lettings to fintech firms Nate and Oodle.
3. Flexible and Fitted
We’re finding it harder to agree longer leases for clients, especially on smaller spaces. Our most recent letting is 18 months long. Where clients are comfortable with this, it’s a brilliant way to increase rents and decrease voids. Where the product is strong enough, clients have less anxiety over these shorter leases. The spaces will easily re-let.
Fitted spaces make this flexibility possible. We can complete lettings and move-ins more quickly, giving customers immediate access.
4. Not Serviced
Serviced offices were a great stopgap earlier in the year, but they’re too expensive in the long term. Many of the companies now leasing space from us say that they were unhappy with the environment and the cost. They also wanted something to make their own. We’ve been able to help them make the transition quickly, without losing out on the service they’re used to.
Companies are buying into more than just office space. Community is important; there must be something beyond the office door. It doesn’t need to be a full-on events schedule, but it should be meaningful and add value. Creating a cafe and lively communal spaces at one office helped us take it from 45% to 90% occupied in three months.
In summary: Good quality, well-located space is letting well. This has always been true. Now we’re seeing customer needs evolve. It’s less B2B and more B2C. Those customers are more demanding, but they offer landlords that ‘get it’ the opportunity to fill up their buildings with high quality companies.
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