Working from home could revive the high street

As companies scale back their corporate offices, a shift to neighbourhoods and suburban locations could boost local high streets.

A commercial property survey by the Royal Institution of Chartered Surveyors (RICS) shows almost respondants, a colossal 93 percent, said businesses would be scaling back their office space in the next two years.

It said a move away from urban hubs could prompt a shift to neighbourhoods. RICS found most members expect retail and office rents to fall further this year.

As the global pandemic continues to take its toll, the survey results predictably point to a further deterioration in conditions. In Q2, a net balance of -55 percent of respondents reported a decline in occupier demand.

When respondents were asked if they felt demand for office space in suburban locations may rise in place of urban centres over the next two years, 64 percent felt this shift would occur.

A driver for the high street

This not only suggests there could be some significant changes in store for the office sector moving forward, but also interestingly, a potential driver for regional high streets.

Hew Edgar, head of UK Government Relations for RICS, warned of a “polo mint” effect - a hollowing out of city centres, but that this could bring benefits: “With downturn there can be opportunity, government must also look to replace uncertainty with stability; and fill the middle of the commercial sector polo mint.”

“Offices and shops in city centres need support as people stay away from their normal workplace, and although local shop hubs are benefitting the market must be addressed as a whole.”

Simon Rubinsohn, RICS Chief Economist, said tenants are thinking about a shift because commercial property in central locations is more expensive, while people are wanting to work more from home and spend extra time in their neighbourhoods.

“For a lot of businesses they are thinking about that opportunity to move towards suburban locations. We’re looking at a very different model going forward: there may still be a central location but it may just be a lot smaller.”

Image FashionUnited; Article source: BBC