When Covid-19 sent us all scurrying home in March 2020, the world was turned inside out. City centres became ghost towns. Shopping centres and retail parks stood empty as smaller neighbourhood stores did a roaring trade. Homes became schools and workplaces, and former offices are now becoming homes.
The City of London Corporation is looking to work with developers to convert office space left empty by the pandemic into at least 1,500 residential units in the Square Mile by 2030. This is also happening across the UK. In May, the Local Government Authority said that in some parts of the country, a third of new homes were office-to-residential conversions.
Big businesses are drastically rethinking their property portfolios. HSBC plans to cut 20% (3.6m sq ft) of its global workspace. BP has told 25,000 of its UK staff to work from home two days a week. BT is actively pursuing a hub-and-spoke model with a smaller city centre nucleus orbited by regional centres that encourage more flexible working.
But with most occupiers tied into long-term leasehold contracts, there is little concrete evidence that the dire predictions of a mass exodus from city centres that grabbed headlines at the start of the pandemic have come to pass – yet. Still, it is clear that occupiers’ needs are changing. And one of those changes is the growing number of occupiers who are considering taking space in business parks.
So why are parks looking such an attractive option, how much of an uptick in office space leasing activity or enquiries have business park landlords experienced and is there sufficient capacity to satisfy growing demand for space?
As occupier activity across the UK starts to kick into gear, the early signs are that business parks are seeing strong interest from prospective tenants due partly to their accessibility by car and rail, according to Ben Dickins, Senior Asset Manager at Catella APAM, they also appreciate the wellbeing benefits parks offer.
“Growing awareness of the academically proven benefits of access to green space is evident when we discuss requirements with tenants,” says Dickins. “Companies’ needs haven’t changed – they all want a productive, healthy and happy workforce – but employees’ wants and needs have changed. The pandemic has brought everyone closer to nature and their local communities. It’s these aspects that out-of-town business parks can offer that city centres cannot.”
There are a number of examples of companies upping sticks and relocating out of town. One high-profile example is telecoms giant Three UK’s move out of central Maidenhead to nearby Green Park in Reading. However, for now, moves of this nature are the exception rather than the norm.
The big picture: an outdoor cinema is among the new facilities being added to Thames Valley Business Park.
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