Do open plan offices really encourage collaboration?

For decades the trend among workplaces has been to move employees out of individual offices and cubicles and into open plan spaces. A significant driver behind this has been ever-increasing rents which have put pressure on companies to make the most effective use of every square metre of floor space. 

Another key reason for tearing down walls and removing partitions is to physically bring individuals and teams together in order to foster greater collaboration. The idea was that with easier access to their colleagues, office workers would potentially interact more and thus become more efficient.

But have open plan offices really been successful at encouraging collaboration? According to a study by Harvard University School in 2018 which tracked face-to-face and digital interactions at the headquarters of two Fortune 500 firms, both before and after the companies transitioned to open plan, this was found not to be the case.

The researchers discovered that workers’ reaction to the new open plan environment led them to begin ignoring each other, with face-to-face interactions dropping by roughly 70% and internal electronic interactions increasing to compensate. So rather than prompt vibrant, face-to-face collaboration, this study found that open plan appeared to encourage a human response to socially withdraw from officemates and instead interact on email and instant messaging.

But what’s the real cause of these findings? Irrespective of the study methodology, was it a problem inherent in open plan, or the design of these particular offices, or was open plan just a bad fit for the culture of these companies?

At Cityspace, we design and build offices for a wide range of companies, big and small, in different sectors, with different cultures. One thing we always stress to clients at the outset is that an office is not just a physical structure, but a community, a place where people gather and work together. Offices are all about people.

So, to make an open plan office work for people, it must be designed and built in a way that not only encourages collaboration and communication, but also makes sure you are using your workspace in the most productive and cost-effective way.

Making open plan work for you

The first step in making sure that open plan will work for your company is to consider the nature of your business, the way your people work, your culture and your brand. It’s important to evaluate how you’re using your existing office space and understand what’s working and what’s not, and whether you have the right configuration of workspace areas, formal and informal meeting spaces, and quiet zones. Getting the right mix of these spaces is key to bringing people together.

Having clearly defined your occupational brief, the next step is to consider designs which deliver this brief, either for your existing office space or for new premises you may be considering. 

We recommend to clients at this early stage that we evaluate several different ways to occupy a space, producing test fit space plans to illustrate these ideas. This process allows your board or steering group to consider the many different designs and layouts possible. Through this consultative approach, your management team can then select the best occupational route which fits your culture and delivers the highest  level of employee efficiency, motivation and retention.

Moving office is the perfect time to consider how you can modernise your workspace to bring people together and enhance work activity, and create an environment that not only enables individuals to focus on their tasks, but also encourages face-to-face collaboration and the sharing of ideas.

Open plan does work, but you must create the right expression of open plan that suits your business. To find out more about how Cityspace can help you develop a productive, collaborative and cost effective workspace, please contact our team at info@cityspacemanagement.co.uk.

Will 2020 be a good year for office tenants?

The New Year has certainly heralded a new feeling of confidence in the London office market. But is a resurgent market necessarily good news for office occupiers?

With low vacancy rates looking set to continue in 2020, and increasing demand putting upward pressure on rents, our view is that it is more important than ever before to think ahead when planning your next move, and ensure you are making the most effective use of your office space.

A new sense of confidence

Investment in the central London office market soared in December, even more so than the usual end of year flurry to get deals done, following the decisive general election victory of the Conservative Party. Agents have attributed this bounce to the fact that investors now have greater clarity on both the legislative agenda and the Brexit roadmap.

According to CBRE, £4.9bn was invested in the final quarter of last year, up 125% on Q3 and on par with the last quarter of 2018. Of this, £2.55bn was transacted in December alone. However, the uncertainty that reigned throughout the rest of 2019 meant that total investment volumes for the year were £11.3bn, a drop of 36% on the previous year and the lowest level since 2011. 

Even so, agents are predicting the recent heightened levels of confidence have set the tone for a more buoyant market in 2020.

Increasing demand for quality office space

Looking ahead to 2020, CBRE predicts that while employment growth will be lower in the overall economy compared to 2019, office-based employment will grow faster than total jobs, driven by the strength of the professional, administrative services and technology sectors. Within this, London is expected to grow slightly faster than elsewhere.

As a result, demand for high-quality office space is set to increase in 2020 and businesses are expected to increasingly use real estate as part of their recruitment and retention strategy in a tight labour market. 

With the war for talent expected to be a significant feature of the office occupier market in 2020, against a backdrop where the supply of space remains low, the conditions are in place for upward pressure on rents.

JLL points to market uncertainty as having been a major factor in eroding the speculative pipeline of new office space, leading to a steady increase in prime rents in the City of London. According to JLL, City prime rents are now £75 per sqft, with premium floors and buildings surpassing £85 per sqft, and is predicting rents could soon reach £90 per sqft for the best in class space.

In the West End, JLL also predicts a flight to quality with occupiers increasingly willing to pay premium rents for the best space, particularly when coupled with proximity to the new Elizabeth Line which is planned to open next year.

How should occupiers respond?

In conditions where demand is increasing and supply of office space remains tight, we advise occupiers to think well ahead when planning their next office move.

For many businesses approaching a lease expiry, it’s important to recognise that there are now fewer opportunities out there, with vacancy rates in London below their long-term average. This means that it will now take longer than you expect to find the next office space that is right for you. 

But this issue can be solved by simply planning further ahead. Nowadays, we recommend to our clients looking for spaces under 5,000sqft to start their decision-making process at least 6 months before lease expiry. For properties between 5,000-15,000sqft we recommend starting up to one year beforehand and, for bigger properties, an 18 month time frame is recommended in order to provide the widest choice available.

As the upward pressure on rents increases, tenants need to carefully consider how they are utilising their office space - whether the office is correctly configured to their working practices, or whether they have the optimum mix of floor space attributed to meeting rooms, informal spaces and work areas.

No matter where you are with your decision making, Cityspace can help you make the right decisions when it comes to your next office move or ensure you are utilising your existing space in the most productive way. To find out more, please contact the team on info@cityspacemanagement.co.uk.

Office Acoustics - An Invisible Problem

In previous articles, we’ve talked a lot about creating an office design that encourages collaboration and productivity amongst office staff. By its nature, design is a very visual process, thinking about how the space is best utilised, and the look and feel of different zones within the office.

But an increasingly important aspect of office design and a potentially invisible problem is that of office acoustics. Any office design has to take account of the particular quirks and nuances of the building and its infrastructure, as well as the effects of suddenly filling a brand new office with hundreds of workers going about their daily jobs.

One thing we always stress at Cityspace is that offices are all about people, and over the next couple of articles we’re going to examine the invisible problem of office acoustics and the significant impact it can have on people’s productivity and wellbeing. In this first article, we’re going to look at the particular acoustic problems that can come with a building.

Raymond James Project 2019

Let’s talk in private

Acoustic problems can often manifest from unlikely sources. For example, one of our clients in the legal profession has a passive cooling system known as a ‘chilled beam’ that runs across the ceiling of their office. Because of their passive nature, chilled beams are more energy-efficient and quieter than fan driven air conditioning units. However, the ductwork surrounding a chilled beam is perforated to allow the cold air to fall. 

In the case of our client, the ductwork for the beam runs across the entire ceiling, over meeting rooms, offices and open plan areas. Because of the perforations, the ductwork effectively created a corridor to carry sound between offices, meeting rooms and common areas, allowing private discussions behind closed doors to be heard across the office. Hardly ideal given the confidential requirements of a lawyer’s office. 

Our client contacted Cityspace to investigate the problem. Because of the design of the chilled beam, boxing it off to stop conversations carrying was not an option, so we brought in our acoustics specialists to monitor and measure the noise.

The solution we came up with was sound masking, where we installed an amplifier and a series of speakers in the ceiling cavity to play an ambient noise at the required frequency to counteract conversations. The volume could be adjusted and was slowly increased over a two week period, so the new sound was not a noticeable change for staff. The problem was solved.

How sound masking works

Adding sound to a space to make it quieter seems counter-intuitive, but it works. Sound masking makes a building seem quieter by raising the ambient noise level of an environment; in this case, making private conversations less intelligible. It does not cancel out sound or eliminate all noise in an environment; it simply reduces how it can be heard.

Three ‘colours’ of noise are generally used - white, pink and brown - which offer different combinations of frequencies which work to muffle intrusive acoustics by giving our ears and brain a continuous background sound.

Many companies today have started to use sound masking as a solution to resolve acoustical issues within their workspaces, not only to increase privacy but to also create an environment that leads to higher productivity. 

How we can help

If you are suffering from acoustic problems in your office, don’t suffer in silence. Please get in touch with the team here at Cityspace, and we can come in and review your issues, and come up with practical and cost-effective solutions to give you both a peaceful office environment and peace of mind.

Could vacancy rates impact your next office move?

Let’s face it, moving office is not a regular occurrence, with most businesses moving every 5-10 years. For many businesses approaching a lease expiry, there tends to be a natural expectation that there will be plenty of opportunities out there to quickly and easily find the next office space that is right for you.

Not so. The current dynamics of the London office market are characterised by high demand coupled with a lack of supply, and therefore a historically low level of vacant office space available. Let me first outline what we are seeing in the market and then recommend what you can do about it.

Recent reports on the London office market have highlighted that the lingering uncertainty has dampened the appetite among investors. Despite falls in the pound this year which has increased the investment case for London amongst overseas investors, stock shortages, economic and political turbulence and investor caution have all combined to hold down investment volumes. BNP Paribas has reported that central London transactions are down more than 40% on the previous H1 five-year average, with investors and owners unmotivated to transact while the “fog of Brexit” remains.

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On the other hand, demand from the occupier market has held up particularly well, supported by strong jobs growth and an unemployment rate at 3.8%, its lowest level since 1974. Typically, the occupier and investment markets are strongly aligned, however, BNP Paribas points to a divergence which has manifested in the London market over the last two quarters.

These stable levels of take-up by occupiers, coupled with sluggish delivery of new supply, has meant that London-wide vacancy rates have dipped below 5% for the first time in over two years, according to Colliers International. In addition, Colliers says a lack of new-build supply is also driving rental growth, leading to the first increase in prime rents for three years. Average rents rose 4% to £72.50 per square feet in the first half of this year; however typical incentives have remained unchanged at 24 months’ rent-free on a 10-year term.

In the City, a lack of Grade space has put upward pressure on prime rents, according to BNP Paribas, with rents rising to £69.50 per square foot in Q2 this year. Positively, for occupiers, however, the vacancy rate rose to 6.8% in Q2, providing occupiers with more choice in a supply-constrained market. In contrast, vacancy rates in the West End have continued to decline, reaching 3.6% in Q2, well below the long term quarterly average of 5.6%, with prime rents at £112.50 per square foot.

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Supply in Midtown also fell in Q2, down 20% on the first quarter of this year, and significantly below the long term quarterly average. BNP Paribas calculates a vacancy rate for Midtown at 4.0%, however prime rents have reThe situation in Southbank and Docklands creates an interesting contrast. Comparing BNP Paribas figures, supply in Southbank remains the most supply-constrained market in Central London with a vacancy rate of just 2.0%, and prime rents of £67.50 per square foot. Contrast this with the Docklands, where supply fell marginally in Q2 this year, but vacancy rates stand at 9.7%, and prime rents in Canary Wharf are £48.50 per square foot. This very much reflects our experience with clients, who are happy to pay more for the vibrant feel and good transport links in Southwark, compared to the more clinical and isolated atmosphere in the Docklands.

So what does this environment mean for businesses that are looking to move office?

Well, low vacancy rates mean you have to begin your property search much earlier if you want to find the ideal space. We now recommend that clients looking for spaces under 5,000 square feet need to start their decision-making process at least 6 months before their lease expiry. For properties between 5,000-15,000 square feet, you should begin the process up to one year ahead. And, for bigger office spaces, an 18-month time frame would be very sensible in order to provide the widest choice available.

Raymond James Project

At Cityspace, we help many clients at the early stage in finding the office that is right for them. Using our extensive property database, we’re able to very quickly provide clients with a range of choices, looking at both on and off-market opportunities. And for any opportunities identified, our Evaluation Report can help clients with their decision making by giving them a clear view of potential costs and timeframe, plus assist them in negotiating the most favourable terms on their new lease.

To find out more, please contact the Cityspace team on info@cityspacemanagement.co.uk.

Have we reached a turning point for office technology?

Over the past 20 years, we've seen an incredible change in how technology is implemented and deployed in the office environment. We now stand at a turning point where new technology is fundamentally changing the way people communicate and collaborate in the workplace, raising new considerations for office design.

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Brands2Life Project

For many of us, it doesn't seem that long ago when we were anchored to a specific desk, tied to a desktop phone and tethered to a PC. Moving away from this safe harbour meant leaving all our technology behind.

But technology has moved forward at a rapid pace and, alongside this, people have not only changed the way they use technology, but also the way they communicate and collaborate with others via technology.

Take video conferencing, for example. In the early days of VC in the nineties, companies required expensive hardware to video conference, installed in selected meeting rooms. These early systems were not the most user-friendly so, to be on the safe side, you also needed a member of IT on standby in case it didn’t work. As a result, these systems were costly, complicated and intimidating for the lay user.

In the past five years, there has been a massive change in the way video conferencing is implemented, and the way people use it within organisations. There has been a significant move away from proprietary hardware to internet-based VC solutions such as Zoom, Blue Jeans and Skype for Business. Speed and quality have taken a massive leap forward, costs have fallen, and these new systems are now much more intuitive and easier to use.

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Ensono Project

Telephony has massively changed as well. Offices no longer need to set up an onsite telephone exchange system containing a limited number of phone lines available - all this has now moved to the cloud. In tandem with this, VoIP (Voice over Internet Protocol) has improved significantly from the early days of Skype, where poor sound quality, echoing calls and hit and miss reliability hampered widespread business adoption. Today, these systems are now cheap, clear and reliable to use.

In the past 18 months, we’ve been seeing more companies dispensing with the desk phone altogether and moving to mobiles, further eroding people’s ties to a certain desk. In the future, it may only be those using high graphics software such as desktop publishing or CAD who require a dedicated workstation, or those where it is a regulatory requirement to record calls such as financial traders.

The rise of smartphones, tablets and laptops has led the move from just a voice connection to the office, to become fully aligned with office software and applications to deliver truly mobile working and allowing multi user group meetings with remote workers.

So, what are the implications for communication, collaboration and office design?

Well, firstly, technology has greatly facilitated a revolutionary change in working practices and acted as a catalyst for the rise of hot-desking, Activity Based Working and more flexibility in where and when people can work through remote working.

With staff now able to use any device from any location, the way people communicate and collaborate has fundamentally shifted from the traditional meeting room environment to technology platforms. People can now gather from remote locations, collaborate on Zoom and organise workflow on platforms such as Slack or Monday.com.

This, in turn, has reduced the number of employees who need to travel in and use the office space, while at the same time increasing the numbers of those who can collaborate in the same place, at the same time, via technology. With the increasing costs of office rents, this is now driving a fundamental rethink in the role of the office as a hub, rather than just a destination for employees.

Less formal peer to peer conferencing has also increased significantly, moving away from the requirement for meeting rooms for conference calls to internet-based calls from peoples' desks or from more informal spaces. This has led to an increasing need to consider office acoustics in open-plan environments and collaboration spaces, and the subsequent need to create zones for quiet concentration.

Ensono Project

Ensono Project

As technology continues to move forward in leaps and bounds, a key challenge for CEOs and Finance Directors is to get the optimal configuration of office, technology, communication and collaboration that is right for them. Often the technologies themselves are difficult to understand, let alone finding the best way to apply them to an organisation.

The solution will never be a one size fits all approach and while it is true that technology has significantly changed the face of office communication and collaboration, one thing has remained the same - offices are still all about people. So, combining the right technology with the right workspaces that help people collaborate, share knowledge, and maximise their productivity and growth remains vital.