Increased legislation, licensing, regulations and tax reforms are putting increased pressure on the UK’s buy-to-let landlords. While some landlords are pulling out and selling up, others want to diversify.
Commercial property letting could be one option, as it appears ripe for innovative ideas and change. UK productivity is falling behind in the league of G7 countries and a lack of innovation in commercial property could block any attempts to move up the table. These findings have been published in a survey conducted at a Property Directors’ Forum in London. This survey revealed that none of the property directors had been contacted by landlords to talk about property innovation. Four out of 10 of the directors actually said their landlords were hesitant about innovation.
Innovation is considered vital for growth and increasing productivity. This could include making buildings more energy-efficient, investing in renewable energy or making working space more flexible. Coworking spaces are becoming increasingly popular. Technology means more people can work from home some or all of the time, but they still need office space for meetings. Other people, such as freelancers, also like coworking space as they can meet like-minded people or share ideas. Many find working from an office is also more productive than at home because there are fewer distractions.
The UK Property Predictions report, produced by JLL, predicts an increase in the volume of flexible space this year. The report says that portfolios are being redesigned to include coworking and more fluid or more diverse use of space. More large organisations are exploring flexible space and coworking. Smart building technology is also predicted to continue growing, as organisations see the importance of the ‘internet of things’ in their buildings.
The research shows employees are being more mobile in and out of the office, so the popularity of flexible offices is a natural progression to respond to the way that people work. This means office buildings will need to be renovated and upgraded to adapt to the change in working practices. Office space will become more multifunctional. Existing buildings will need to be adapted for other uses, which means it is a good time for landlords to get involved by investing in and transforming old buildings such as factories or industrial spaces. This work needs to bear in mind the changing demands that are likely in future years. For example, a coworking space today could become an internet app laboratory in five years, or perhaps a small artisanal workshop.
New build is another key area for investment, with people demanding communities where they can live, work and play.