The Millennials are Coming – Is Your Office Stock Ready for Them?
24th August 2017
Being born and bred in Nottingham I consider it an honour to not only witness first hand but also be responsible for pushing the office market forward as part of my role as a commercial property agent in Nottingham.
Before talking about the office market, I think it appropriate to take an objective view. Nottingham is a great city; we have two world-class universities, a great tram network (although I wish it had been extended to East Midlands Airport, but that’s another story), a thriving leisure scene, a tech sector which is the envy of most other UK cities and a fantastic link to the M1 from the A453. In short, it is now a national hub for millennials who are looking to further their career but also enhance their lifestyle.
Nottingham has always been regarded a cost-effective base from which to run a business with average rents in the core circa £13 per sq ft. Since the tech boom in the city, occupier trend has moved towards the city core as opposed to surrounds.
This year I have seen first-hand take up in the City Core has been at its highest. This suggests that occupier demand is shifting towards traditional city centre characterful period buildings. Whilst there are still good levels of demand for Grade A office product, it’s fair to say the majority of occupier demand is largely coming from the influx of digital firms (technology, media and telecoms industries) who typically prefer buildings with character, charisma and a style which complements their brand and becomes an extension of the firm’s ethos, which in turn enables them to retain young talent.
Location is still key, however, break-out and collaborative spaces, high speed connectivity and transport connectivity and finally the provision of services inside the building are all key factors which can influence an occupier’s location choice.
Now more than ever it is paramount for landlords to check how their space fits in with the current market trend, traditional modern space is to some extent a thing of the past. Going forward landlords need to offer accommodation which gives an occupier brand growth and lifestyle balance to their employees. From what we are seeing landlords who offer holistic packages are reaping the advantages.
Anecdotal evidence of key employers in the city tells me that many preferred to be based in the city centre because:
- Health in the workplace is becoming a hot topic, and Nottingham city centre now has a large range of gyms
- Connectivity – Nottingham is widely acknowledged as having some of the best transport connections in the country
- Strong sense of place and community – millennials want to feel part of something bigger and collaborate with other young talent, bringing forward innovation and creativity
- Amenities – younger people want to be able to shop, eat and bank before, during or after work
With this in mind, I would offer the following advice to landlords: instead of selling your buildings to student investors or residential investors, why not create unique, aesthetically pleasing buildings which offer companies an extension of their brand and focus on the tech industries? Demand for Grade A office space is huge from growing tech SMEs and rents will only rise. What is more, Nottingham is fast becoming a truly global tech hub – the sector growing at a rapid pace and will only continue to expand. These businesses all need a home – is your office stock ready for them?