The office environment has never been so complex, and the role of the physical office, in a real estate sense, has never been more relevant.
The requirement of offering hybrid working to staff is nothing new. Yet, we are now seeing colleagues also wanting their office space to be a great place to work. And for those who work in a less hybrid way, the quality of the office environment is absolutely crucial to staff retention and attraction.
According to a global research survey carried out by commercial real estate specialists JLL last month, 50% of office workers have left their jobs since the start of the pandemic, and of those, 90% have said they would consider moving again in the next twelve months.
More now than ever before, office workers look to their jobs, and their employers, to reflect their own values. And if they do not see enough similarity between their personal values and those of their employers, then they are likely to look for employment opportunities elsewhere.
Financial remuneration remains a crucial motive, particularly with the cost of living crisis, but quality of life is fast becoming a key priority for workers.
At Morton Fraser, we have seen many of these trends at play over the last two years. The firm ensures that each employee has access to financial rewards and prioritises support for our staff – the business strives to be inclusive and diverse, alive to the physical and mental health needs of our people. In doing so, the firm needs to offer a sense of community and belonging, and we must ensure that the values of our people are reflected in the values of our business.
This is where the physical office can play a key role. Earlier this year, Morton Fraser invested over £1million in a new Glasgow office to create a vibrant workspace to encourage collaborative working and support mental wellbeing.
According to JLL’s research, staff who work in a more hybrid way are more likely to look elsewhere, whereas colleagues who are more office based tend to be more loyal. Therefore, creating a great working environment which encourages more people to come into the office is an important tool for staff retention.
And we are seeing these working environments start to take off in Scotland. Morton Fraser's real estate team has been involved in some state-of-the-art office development schemes across the country during 2022. We have seen first-hand the tremendous ESG credentials that modern offices now showcase and the inspiring workspaces that can be created.
Highlights have included acting for BAM Properties in their development of Capital Square in Edinburgh, eight storeys of perfectly located prime, grade A office space. In addition, we have worked with Transport Scotland, who took a lease of two floors at 177 Bothwell Street, the biggest and arguably greenest office development in Glasgow.
Both schemes have a focus on creating a great working environment, a positive work life experience and an alignment with values that really matter to office workers in this day and age.
177 Bothwell Street boasts an "A" rated EPC, an "excellent" BREEAM rating, and famously sources its power from a local wind farm, providing 100% green power. The building is net zero carbon to operate and occupiers, such as Virgin Money, Transport Scotland and CBRE, must sign up to a formal charter in terms of which they agree to work together collaboratively to reduce energy usage.
Capital Square not only has fantastic views of Edinburgh city centre, including unrivalled views of the castle, but also has a top-quality roof terrace, landscaped gardens and a private courtyard for seamless drop off and pick up. This development has attracted respected professional services firms such as Brodies, Pinsent Masons and Mazars Accountants.
Employees working in both developments will have access to top quality Grade A office space, designed and configured to enhance the working life experience. They should feel a harmony between their own values and those exhibited by their employers and the buildings within which they operate. Even the commute to and from both buildings is encouraged to be “greener”, with both developments offering huge capacity for bike storage and "spa level facilities" for cyclists and runners.
Development is challenging at the moment with cost of materials volatility, continuing supply chain issues and rising inflation and interest rates, but demand for Grade A office space across Scotland, and particularly in Glasgow and Edinburgh, remains very strong. In fact, it is far from obvious where the pipeline is for 2023 and 2024, with Haymarket in Edinburgh having been fully pre-let for some time now.
The office is going to play an increasingly integral role for businesses, particularly in the hybrid working world, as even those working remotely need a central hub whether for collaboration, for socialising, for helping with physical and mental health or even just for a change of scenery. The office sector has never been more vibrant and open to opportunity. Hopefully, development can keep pace and new office schemes can get underway in 2023.
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