Post-Covid, the trend towards home working has caused a massive downturn in city/Town centre office use, and that decline has not shown signs of rectifying itself as quickly as most property and economy commentators anticipated.
Covid. 2020. Lockdown. Town and city centres are empty. Overnight, small businesses that relied on the trade of office workers to keep them open – the lunch shops, cafe bars, street vendors – went out of business.
Commercial property leasehold and freehold operations ground to an immediate halt. After all, who needs to buy of rent office space if everyone works at home?
With instant effect, towns, cities, and urban areas became ghost towns. Over the coming days and weeks, local wildlife would become accustomed to the emptiness and begin to wander the previously off-limit inner city streets.
Now that led to some great social media posts, with goats peering in through empty shop windows, but ultimately, what becomes of those empty city spaces?
Because as an aftermath of those unprecedented times, we, as a country and as a people never did return to normal. Instead a new normal was born, a world where some companies gave up their office spaces and made the home-working situation a permanent one.
Some companies went for a hybrid home/office solution, while others rushed – or attempted to rush – their workforce back to the offices and to an ever-changed town/city centre.
Ever-changed because, of course, a great many of those smaller ‘supplier’ businesses were now gone for good, and new ventures pop up more slowly now, as everyone takes time to adjust to this new level of ‘new normal’.
And where does this leave the mainstay of our town and city centres and surrounding areas, the commercial property market? A bit stuck, that’s where.
A lot of commercial property came back onto the market when businesses decided not to come back to work. So now most commercial property agents have large portfolios and not enough interest to fill them.
Will this change, though? Has the working landscape changed forever or will there be a gradual creep back towards full, vibrant, bustling, commercial hubs again?
While it seems unlikely that the companies who let their offices go will change their mind, we have to consider that there will always be companies starting, expanding, and relocating to keep these city spaces busy and full of life.
People working in offices have a beneficial impact on the economy. Travel costs, parking, lunch cost, and of course the plethora of small and niche shops that pop up to service the avid lunchtime shopper.
Most property and economic advisers and commentators now believe that progress – back towards a significant percentage of occupation levels for the commercial districts in our town/city areas – is inevitable and that there will continue to be a steady trend of increasing occupancy.
All the signs do point towards the steady re-us of our towns and cities – and not just by the goats and other animals. People need people. We are social animals, and like being amongst others. Elongated periods at home alone have detrimental effects in a number of key areas, not least our mental health due to increased isolation.
Businesses operate best when team members bounce ideas off each other. Work flows better, creativity is enhanced, and productivity and profitability are all increased overall by having all staff in.
There’s a great tendency to overlook just how important the contact with our colleagues is to us as human beings, and it’s a timely reminder to consider it in this fashion.
Alone we are just one small part of the work machine. Together, we are the work machine and there are no limits to what we can achieve together.
Commercial, city centre properties will gradually start to fill up again. Small businesses will reappear. Pop-up food places will, well, pop-up. As the town and cities fill again, so will the economy grow and recover.
Our old normal will once again become our new normal. Sure a few extra people, and even a few extra companies may stay working from home, but, overall, humans are social animals and the benefits all-round from us being physically at our work places are too great to ignore.
Commercial Property is still a great, safe, investment and should be treated as such.
Written by Steve Taylor.
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