ESG and the Working Environment – ‘A Whole New Eco-World’
Clear Change in How Occupiers Use Space
It is no doubt a challenging world for landlords, tenants and employers that we currently live in. We are constantly told about the nuances of the working environment, how we are supposed to work and what is expected of us. However the recent Pandemic has taught us is that we can be trusted to work productively from any environment and any location. We would argue that our usual 9-5 has been turned on its head and we are now in a market where competition is stiff for new recruits and the age-old issue of retaining staff within the business.
This is where we are seeing a resurgence in the office market but not in ways that you would expect. We are seeing a rise in demand for quality working accommodation and not the traditional office space that the average professional would consider as a working environment. Long gone are the days of packing teams in rows upon rows on an office floor to achieve value for money in their office space. There is now an emphasis for better working practices, collaboration, creativity along with sharing ideas. This is now at the heart of everything that we do, how we work and indeed WHERE and WHY we work for a living.
This change isn’t just co-incidental with the pandemic and current economic forces. This is how the younger generation or Generation Z (born during the mid-90’s) want to work and how can we argue with that? These are the new employees of today and they have an element of choice of who and where they want to work for a living.
‘Flight to Quality’
So what are businesses looking for in a working built environment? We are seeing more decision makers looking at the best accommodation a city or town has to offer and these now include company policies regarding ESG (Environmental, Social and Governance) aspects along with amenity and break out space. The message is clear, The better the space the more likely a business is going to be able to attract the best caliber of staff.
We are seeing occupiers looking to completely refurbish their office space and use surplus space once occupied by employees who now work on a hybrid basis to be utilized as wellbeing centers or collaboration zones. Employers are now also encouraging staff to actually want to be in the office to share ideas with colleagues and use these designated spaces to attract them back in to the working environment.
This approach also encourages loyalty and gives employees responsibility in their actions. It also encourages people back into the office for training reasons which benefits junior staff and graduates who are the future of the business and this is not being forgotten.
Lack of Stock
An issue we are currently facing is a lack of available stock of this nature in the westcountry so developers and occupiers are having to be flexible in their approach. Employers are now providing staff wellness programs and more creative use of their space through activity days to encourage staff to collaborate. In addition car shares and cycling initiatives are being encouraged to work as a team and to share the cost of parking and emissions in urban centers.
Due to the lack of available stock we are seeing occupiers taking it upon themselves to either pay the higher rent to relocate to these modern premises or refurbish their existing space to accommodate all the ideas stated above. We believe there will now be a strong desire for eco-friendly buildings (some with BREEAM Excellent credentials) and although build costs are rising so inevitably will rents per square foot. This is exacerbated by a lack of quality stock and the appetite from occupiers trying to attract the best caliber of staff.
Summary
An awareness of eco-practices, emission saving and an understanding of how the built environment can have a serious impact of the environment is how the new generation are seeing and judging the world. We as real estate professionals are required to provide our recommendations to clients and us agents are at the forefront of the marketplace which is seeing a dramatic dynamic change in how business are using their premises. Competition for staff is key to the longevity of a business and a company allowing its staff to reach their potential will be looked upon as a market-leader in the employee driven recruitment market.
The need for change is clear and an environmental responsibility from a company is more likely to survive a challenging market when the best staff want to be a part of the journey.
Vickery Holman are the leading property consultancy in the South West, with around 80 people based out of offices in Bristol, Exeter, Plymouth and Truro. Our services include commercial agency, building surveying, development, investment, property management, business rates and lease advisory. We also have the largest team of RICS Registered Valuers in the South West for secured and non-secured valuation work.
Head of Exeter Agency
