Exclusive: Most commercial landlords are struggling to find tenants for their office buildings
More than three fifths of the UK’s commercial landlords are struggling to attract tenants to traditional offices as businesses’ workspace demands have changed rapidly during the pandemic, according to new research that was exclusively shared with City PM today.
In fact, more than six in ten commercial landlords are currently struggling to attract prospective tenants to fill their traditional office spaces.
Almost two thirds (64 per cent) reported having seen a “notable shift” in tenants’ demands during the pandemic, including terms and use of space, flexible workspace provider infinitSpace has found.
The firm’s research found that UK commercial landlords currently dedicate an average of 33 per cent of their office portfolio to some form of flexible or co-working spaces. By 2026, this is forecast to rise 11 per cent to 44 per cent.
Since the start of 2020, 59 per cent of office landlords have begun offering shorter and more flexible leases.
Over half (52 per cent) added new facilities to allow tenants to collaborate when inside the building, such as meeting rooms or breakout areas, while 63 per cent have added facilities to improve the wellbeing of tenants, such as a gym or relaxation space.
“What businesses want and need from their office has been steadily evolving over the past decade, but the pandemic has kicked the pace of change into overdrive,” said Wybo Wijnbergen, CEO of infinitSpace.
“As hybrid working becomes commonplace and businesses look for more collaborative and engaging workspaces, many landlords are struggling to attract tenants if they don’t have flexible offerings,” he added.
“Encouragingly, most office landlords are responding to this challenge. From the terms of the leases and the facilities on offer, to the ways their workspaces foster innovation and offer a great tenant experience – commercial landlords are evidently looking to transform their buildings to fit the ‘new normal’.