March 1, 2016

Smart Cities emerging rapidly in China due to increasing urbanisation ⁰

by Sara Bean • Cities, Facilities management, News, Technology

“Smart Cities” are emerging as a major force in China. According to a recent CoreNet Global report, China’s urban population surpassed that of the rural population in 2011 and it is estimated that by 2035 there will be more than 70 percent of the population living in urban areas. That urbanisation is creating more pressure for China to leverage digital technology to create smarter cities, which are defined as metro areas that leverage digital technology and intelligent design to facilitate sustainability, along with high-quality living and high-paying jobs. Initially, there were several ‘beachhead’ cities that embraced Smart City initiatives such as Hangzhou (above), Chongqing and Chengdu. Subsequently, the China Central Government issued clear guidelines to roll out smart cities in a systematic and more widespread way. While smart cities are definitely on the long-term agenda for China’s strategic planning, their impact on corporate real estate and site location decisions remains to be determined.

March 1, 2016

Rents and refurbishment activity rise, as office shortage hits UK cities ⁰

by Sara Bean • Cities, Facilities management, News, Property

Last week we reported that the shortage of office space in London was driving up demand within the UK’s regional office markets. Now a new report claims there is under a year’s supply of Grade A space available in the regions which will result in rental inflation. Bristol and Cardiff are predicted to see largest rises at 12 percent and 9 percent respectively. According to Savills’ Regional Office Market Review & Outlook report, average take-up across the UK is currently at 4.6 million sq ft, and availability down 18 percent on 2007 levels. Although speculative development has risen by 129 percent over the last year to approximately 3.5 million sq ft, with 28 percent pre-let it is expected that this will largely be absorbed in first two quarters of 2016. This lack of available space has driven demand for value-add office opportunities to help plug the gap, with January 2016 marking the forty-first consecutive month of refurbishment activity.

February 27, 2016

Want a Google workplace? + The boundless office + Belief in corporate wellness ⁰

by Sara Bean • Facilities management, Flexible working, Newsletter, Wellbeing, Workplace, Workplace design

In this week’s Insight Newsletter; Kelvin Bromley says the office is reinventing itself; Dr Caroline M. Burns argues that the Google office doesn’t work for everyone and Leeson Medhurst warns that providing too much choice at work can lead to confusion. Mark Eltringham finds wellness programme succeed based on perceptions not actions and Matias Rodsevich explores how performance indicators can help meet business goals. A new BCO report reveals commercial property costs are higher than widely thought; why Gen X is the hardest working generation; the Workplace Foundation says the UK is on the verge of a flexible working tipping point and London legal firms move towards open plan working. Download the latest issue of Work&Place and access an Insight Briefing produced in partnership with Connection, which looks at agile working in the public sector. Visit our new events page, follow us on Twitter and join our LinkedIn Group to discuss these and other stories.

February 26, 2016

War for talent and dwindling supply in London boosts regional office market ⁰

by Sara Bean • Facilities management, News, Property, Workplace

London office supply is at an all-time low according to JLL’s latest research, with around 18 million sq ft of offices required, but less than 7 million sq ft under construction. This is one of the reasons why 2015 saw a surge in pre-leasing activity across the Big 6 regional office markets, comprising Birmingham, Bristol, Leeds, Manchester, Glasgow and Edinburgh, with 850,000 sq ft let across 17 transactions compared with 15 over the five years from 2010-14. The survey shows that rental growth and refurbishment are key themes with refurbishment schemes totalling 800,000 sq ft will be delivered in 2016, with a further 10 new schemes totalling one million sq ft due to start. Greater convergence between HR and real estate also means the war for talent is a factor influencing occupier decision making. CEOs continue to cite a shortage of skills as a concern, as many Gen Z students are expected to leave their first job within a few years.

February 25, 2016

Over half of UK employers will implement flexible working by next year ⁰

by Sara Bean • Facilities management, Flexible working, News, Wellbeing, Workplace

The UK is on the verge of a flexible working ‘tipping point’ with more than half of employers offering staff more choice of where to work. Working anywhere: A winning formula for good work? produced by Lancaster University’s Work Foundation, and commissioned by Citrix, reveals that 2017 will be the time when over half of organisations in the UK are likely to have adopted flexible working. It also predicts that over 70 percent of organisations will have followed suit by 2020. The Work Foundation, which hosted interviews with academics, business leaders and the public sector to glean insights around the theme of flexible working, supported by research with 500 managerial level employees within medium to large businesses, warns that there is still much to be done to address attitudes towards flexible working, from ensuring people don’t end up working longer hours to dealing with feelings of ‘disconnect’.

February 24, 2016

London’s top law firms embrace open plan design to offset rent rises ⁰

by Sara Bean • Facilities management, News, Property, Workplace design

London’s largest law firms are reducing their office space and radically rethinking their property strategies as a way of dealing with the endlessly rising rents in the districts in which they prefer to base themselves. According to research from CBRE the one hundred legal firms that occupy the largest amount of square footage in the Capital experienced rent rises of 7 percent in 2015 to an average of £43 per sq ft. Many of the CBRE Legal 100 firms, 95 of which are now located in the City, have been responding to rising costs by taking less space and occupying more efficiently, and a significant number are shifting to open plan working. Last year, there were 63 relocations, 19 percent more than the previous year, pushing office take-up in the legal sector to 12 percent above the 10 year average. Yet while the CBRE Legal 100 firms are downsizing their footprint in London, international firms are in expansion mode.

February 24, 2016

Too much choice at work just leads to paralysis by confusion ⁰

by Leeson Medhurst • Comment, Facilities management, Workplace design

There is a general acknowledgement within the realm of FM and workplace that its world is changing; and that organisations must be ready and able to adapt to the shifting landscape, or else slip through the cracks and go under. Various factors are contributing towards this drastic reform, including three key infrastructures: technology, corporate and social. The rise of technology will play a significant part in the inevitable workplace revolution, as will the workforce of tomorrow. In addition to these technological advancements, five generations are now making up our modern workforces. It is, therefore, imperative that organisations offer a working model and a workspace that can be tailored to suit the multitude of traditional and modern workers, in order to meet current and future needs. Embedded in our psyche is the belief that the more choices we are presented with, the better, but is that true?

February 23, 2016

High demand in Dubai office market continues to sustain rents ⁰

by Sara Bean • Facilities management, News, Property

Office rents in Dubai’s main markets have remained strong as a result of continued high demand from both international and domestic occupiers, reports Cluttons, but despite a sustained demand, occupiers remain cost conscious and budget driven in the face of a softening global economic backdrop. Landlords, by contrast appear to be slow to react to a cooling market, with many reluctant to move on asking prices and others demonstrating a lack of flexibility for lease terms at renewal. The emerging gulf between market reality and landlords’ expectations is a concern, says Faisal Durrani, Cluttons’ head of research, “particularly for a market that is now starting to show signs of maturity.” The analysis of the performance of 22 submarkets across the city in the first quarter of the year reveals that 13 submarkets witnessed no change in starting rents in 2015, seven experienced notable increases and the remaining two lower limit rents decreased over the 12 months of 2015.

February 22, 2016

Commercial property costs organisations more than commonly supposed ⁰

by Sara Bean • Facilities management, News, Property

The British Council for Office (BCO) has released a new report which questions the commercial property industry’s commonly ‘accepted wisdom’ that if you break down overall business operation costs, 80 percent of the total goes on salaries and 10 percent on property, with other expenses making up the rest. The BCO’s analysis has found that a more realistic split is 55 percent (salaries), 15 percent (property) and 30 percent (other business costs). So while salaries continue to dominate overall costs, property and non-property business costs play a greater role than the commonly received idea. The BCO believes this clearer understanding of how much property represents of overall business costs will now change, influence and underpin business decisions. This new analysis may also have an impact on rental forecast and could also affect the impact of changing business rates – affecting what organisations may be able to afford.

February 20, 2016

‘Ghosting’ employers + Office buildings still relevant + Millennial engagement ⁰

by Sara Bean • Environment, Facilities management, Flexible working, Newsletter, Property, Wellbeing

In this week’s Insight Newsletter; Darren Bilsborough on why office location is as important as design; Mark Eltringham says ‘ghosting’ an employer in the manner of the Spanish civil servant who hadn’t turned up to work for six years, is more common than you’d think; how office design is in the beauty of the beholder and why the office property market continues to thrive, despite rumours of its demise. A new report finds dysfunction at the heart of the public sector workplace; the government largely ignores the self-employed; younger workers are more engaged than the middle aged; RIBA consults on the future of its HQ; and many UK commercial buildings are failing to meet energy standards. Download the latest issue of Work&Place and access an Insight Briefing produced in partnership with Connection, which looks at agile working in the public sector. Visit our new events page, follow us on Twitter and join our LinkedIn Group to discuss these and other stories.

February 19, 2016

A fifth of UK commercial property may fail to meet new energy standards ⁰

by Mark Eltringham • Environment, Facilities management, News, Property

Earlier this week, we reported on the surprisingly large proportion of the UK’s commercial property that emitted far more carbon than it was designed to produce. Now, a new report from Cushman & Wakefield suggests that nearly a fifth of commercial buildings in England and Wales could be barred from being let because it does not comply with new Government energy standards. The report urges owners and investors to understand their risk and where necessary make improvements to ensure their buildings exceed the minimum energy efficiency standard – or face the prospect of the value of their assets decreasing significantly. The Government’s Energy Act, passed in the last Parliament, included a provision that from April 2018 it will be unlawful to rent out a business property with an EPC rating below the Minimum Energy Efficiency Standards (MEES), which is an ‘E’ rating. Any building that fails to meet this requirement (rated ‘F’ or ‘G’) will be classed as “sub standard” and may suffer a substantial drop in value.

February 15, 2016

UK commercial buildings emit far more carbon than they were designed to ⁰

by Mark Eltringham • Architecture, Environment, Facilities management, News

Commercial buildings in the UK may be producing an average of 3.8 times more carbon than the estimate presented at their design stage, according to research from InnovateUK. The study examined six years of data from Innovate UK’s Building Performance Evaluation (BPE) Programme. It found that only one of the 48 buildings studied produced the amount of carbon specified by its design. In some cases, total emissions were 10 times the rate calculated for Part L compliance. ‘Building Performance Evaluation Programme: Findings From Non-Domestic Projects’, identifies complex energy controls and building management systems (BMS) as significant factors in poor levels of carbon emissions, suggesting that they should be simplified. Although two-thirds of the buildings studied employed renewable energy, a significant proportion of these experienced problems that had a negative impact on their energy consumption and carbon emissions.