March 29, 2018
With a year to go, occupiers are less concerned than they were about the impact of Brexit
Occupiers are less concerned about Brexit than they were a year ago, according to a new CBRE research survey of over 100 major occupiers across Europe, most of whom have pan-European or global operations. By late 2017, the proportion of European occupiers worried about Brexit having a ‘very significant’ impact on their operations in the UK had dropped from 15 percent to 6 percent compared with a year earlier. The proportion of occupiers worried about Brexit having a ‘significant’ effect has also fallen, from 38 percent to 33 percent, meaning that the number of occupiers worried about negative impacts from Brexit has fallen in total from 53 percent to 39 percent. A year to the day on which Britain aims to exit from the EU, global real estate advisor CBRE has published an updated guide unpicking some of the key real estate impacts of Brexit.
Demand for labour is likely to remain relatively strong in the near-term which is one of the main reasons why employers support a national approach to tackling the UK’s skill and labour shortages post-Brexit, in comparison with a regional or sectoral one. According to the latest quarterly Labour Market Outlook from the CIPD and The Adecco Group the preference for a national labour or skills shortage occupation scheme reflects the main reason given by organisations for employing EU nationals, which is that they have difficulty finding local applicants to fill lower skilled roles, as cited by 18 percent of employers. The national survey of more than 2,000 employers found that the relative majority of employers (41 percent) would prefer a UK-wide immigration system that is based on national labour or skill shortage occupations in the likely event of migration restrictions once the UK leaves the European Union. In contrast, around one in ten (13 percent) favour a sector-based policy and just 5 percent would back a regional policy.
There have been 18 months of faltering net effective rents within the commercial office market in the Capital since the Brexit referendum, with ten of the 18 Central London office submarkets monitored in Cluttons’ latest London Office Market Outlook report registering rent falls in the final quarter of 2017, buoyed by additional incentives such as contributions to fit out costs and even delayed completions becoming commonplace in many locations. The report also raises concerns about the potential for an oversupply of serviced offices within the Capital. However, despite this and a perception that Central London offices are currently fully prices or possibly over-priced, by both occupiers and domestic investors, London remains a resilient city, continuing to attract high volumes of overseas capital. Employment growth is of course expected to be influenced by both the levels of GDP growth during 2018 and the Brexit divorce proceedings, which in turn will affect rental values. But says the report, aside from concerns over Brexit, there is no evidence from recruitment agencies to suggest a current, or planned exodus of finance and banking professionals from the City.
The proportion of flexible space within occupier portfolios will continue to increase in 2018; a growing adoption of technology will redefine buildings, workplaces and portfolios; and it will be a year of decision for many businesses regarding Brexit. These are among the ‘UK Property Predictions 2018’ report from JLL which covers a range of different topics, with a particular focus on UK corporate occupiers. The report claims that traditional static portfolio concepts are being redesigned to incorporate new formats of space, co-working and a more fluid and diverse range of space options that support creativity, innovation and collaboration. 
March 21, 2018
There are at least some reasons to be optimistic about the UK’s tech sector post Brexit
by Gary Chandler • Comment, Property, Technology, Workplace design
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