The 2 Most Important Charts in Office Leasing & How to Respond to Them

By Mia Brown
News • Thoughts
31st August 22

They show key secular trends that landlords & their advisers must adapt to…

1.    Office Lease Lengths Are Getting Shorter

We knew this before the pandemic. Now leases are even shorter. In 2019, the average lease length was just over 6 years. During the pandemic, real-time metrics showed average lease lengths as low as 30 months (not including coworking).

The chart is trending downwards because of coworking, managed space, Cat A+, WFH, hybrid, and – most important – uncertainty.

When lease events are more frequent, there is more renegotiation, and your space will be on the market more often.

So buildings must always attract new customers, or even better, keep existing customers within their ecosystem at renewal, at higher rents…

How?

• Do the basics better than anyone
• Build deeper relationships with customers (meet them, email, market to them)
• Create an irresistible offer
• Invest in your marketing strategy

Now chart 2…

2.    Sustainable Buildings Are Worth More

Careful with this one – it’s not conclusive.

There is an emerging premium for green assets – investors will pay more for offices with higher BREEAM ratings, shown by the yield spread in Europe.

Knight Frank also found that BREEAM outstanding buildings achieved a 12.3% rental premium.

But new buildings are worth more AND they have the best BREEAM ratings. We don’t yet know which is more important – the data will be conclusive in a few years.

It is logical that investors & occupiers pay more for green buildings. The focus on CSR, ESG, the climate crisis, MEES regulations, and energy price inflation all feed this chart.

So try to make your building as green as possible. Then market those features:

• The ‘difficult’ & expensive things (retrofitting, increasing the EPC score)
• The ‘easier’ stuff (waste management, offsetting, community engagement, utility monitoring, etc)

In summary…

Monitor and adapt to these trends.

You’ll lease space faster, at a higher rent, and your buildings will be worth more.

Written By Jonathan Vanstone-Walker

Featured Stories & Insights

10th May 24

7 Ways Your Property Manager Can Help With Your Lease Renewal Cycle

Remarketing space is a nightmare at the moment. It’s so much easier to renew with...

Read More
30th April 24

How to Repackage Offices for Maximum ROI: Prioritise Benefits, Not Features

“Quite often, you come up with great ideas, but when we are all on Zoom,...

Read More

20th April 24

Property Awards 2024: TSP Named Finalists in 3 Coveted Categories

TSP is thrilled to announce that we have reached the final in three prestigious categories...

Read More
17th April 24

6 Striking Office Turnarounds

Discover six office refurbishments that have been strategically repackaged to win in today’s flexible market. 1. YY London –...

Read More
12th April 24

IN DEPTH – MIPIM EDITOR’S DINNER: Reasons to be cheerful: un, deux, trois

As featured in Property Week • Sponsored by TSP Guests at Property Week’s annual Editor’s...

Read More
10th April 24

Client Success Stories: How Bowel Cancer UK Saved £1m+

Bowel Cancer UK is a growing charity doing crucial work to fight Bowel Cancer. It’s...

Read More

View all

Let's Talk

Got a question? Use the form to get in touch.

    Sign up to our newsletter

    For updates on commercial property news and events.