While there hasn't yet been the rush back to city centres that some predicted when restrictions eased, schools re-opened after the summer break and more people got double jabbed, many are now starting to leave their home offices and kitchens behind in favour of a mix of office and remote working.
Some employers are increasingly keen on colleagues going back to their workplaces, citing the benefits of collaboration and higher productivity. Other firms are promoting a hybrid approach that can meet people's lifestyle needs by continuing to work remotely. A lot of employees are realising they did actually miss water cooler chats about who should have been voted out on Strictly Come Dancing and the latest Succession plots. And recent research has pointed to evidence that there are mental health benefits to be had from commuting.
There is also recognition of the detrimental effect a lack of commuters is having on the 'ecosystem' in cities, with many firms, from dry cleaners to coffee shops and bars, struggling to survive because of the low daily footfall.
Uplift in demand for high-quality office space
We're encouraged by the fact that, as Scotland continues to navigate out of the pandemic, overseas property investors are being attracted by the return to near normality. But businesses have to realise that people's expectations have been impacted by COVID-19 and offices need to change to reflect that shift. There can’t be a one size fits all approach - investors we're talking to are looking for office space that will encourage workers to return by offering them a flexible, attractive and safe environment.
We've definitely seen an uplift in the last few months in investment in the Scottish commercial property market and have even witnessed bidding wars for high-quality office space. A recent example is the level of interest generated in the Aurora building at 120 Bothwell Street in Glasgow that was finally bought from M&G for European fund manager Forma Real Estate – its first UK acquisition.
When talking about high-quality office space, I'm referring to properties that are designed to meet the changing nature of working patterns and are set-up to provide increased collaboration space, a flexible approach to desk layout and plenty of cycling, showering and parking facilities.
And with the focus on sustainability, particularly post-COP26 in Glasgow, investors and employees are looking for buildings that meet environmental, social and governance (ESG) criteria. There is a premium on commercial property that targets net zero emissions, has low density levels and has potential for mixed use, such as office and residential, or leisure.
As well as office space having to be fit for purpose, it’s time for the Scottish Government to offer greater clarity on returning to the workplace, to help businesses get their colleagues back in a safe and consistent way. We’d like to see a more prescriptive plan from the First Minister for getting people back to the office and more collaboration with businesses to ensure a smooth transition as we all adapt to the ‘new norm’. Many businesses, especially in highly regulated sectors, such as financial services, are especially keen on more staff getting back to the office. Much needed clarity from government would allow for quicker decisions from both tenants and investors to ease that process.
It's unlikely that office-based 9 to 5 working, five days a week, is set to return any time soon, so offices have to adapt to the new demands of workers and provide the flexibility that's needed.
About the author
Patrick Ford is a director in the National Capital Markets team based in Glasgow he works with clients including M&G Real Estate, CLLA Investments and Kames Capital.
To contact Patrick, email Patrick.Ford@colliers.com