In focus: A bleak new dawn?
Insider deputy editor Ben Pindar gets a glimpse of the future and wonders how developers will adapt as occupiers gain the upper hand?
As the eurozone crisis staggered from one emergency meeting to the next and the Greek politicians did their best to unsettle the painful process, I joined a Jones Lang LaSalle breakfast seminar that took the bold step of trying to predict the economic future of Leeds in these most unstable of times.
Inevitably, the uncertainty over the European bail-out strategy dominated conversation as the agency team aimed to offer a glimpse of the years ahead in the commercial property sector.
While predicting another 18 months of low-level growth, Jones Lang LaSalle's projections came with the condition that the eurozone survived the coming months – all other scenarios are not even remotely pleasant.
However, despite the threat of a European-wide collapse, the most interesting thing to come from the event was the research the agency has done on the future of the office sector. It predicts a massive shift in the nature of our office buildings, how we use them and, most importantly, the lifespan of our structures.
The Future Of Offices report claims changes to our workspaces will be even more dramatic over the coming decade than they have been over the last ten years, thanks to the rapidly increasing advances in mobile technology.
The research suggests more people will be working away from the office and this means business requirements will not only be smaller, but will also need much larger social areas to cater for collaboration between employees and just a small amount of room for desk space.
Jones Lang LaSalle also say leases will continue to get shorter, dropping to an average of just seven years, the requirement for environmentally-friendly spaces will become ever more important and the life cycles of buildings will also drop dramatically.
What this ultimately means is occupiers will become much more powerful as they seek Grade A spaces to represent their brand and cater for their needs, and developers will have to adapt far quicker than they have done in the past to ensure their facilities remain attractive as a result of the increase in churn fuelled by short leases.
It all presents an interesting problem for the Leeds commercial property market and developers across the rest of Yorkshire.
The sombre outlook for our economy means most occupiers and developers are being very cautious at the minute, but what remains unchanged is the fact there are a large number of big requirements on the horizon.
However, with more powerful occupiers demanding green credentials, more adaptable spaces and, crucially, shorter leases, you have to ask if the developers will be able to afford to meet their requirements with the increased costs, short-lived guarantees and the prospect of a greatly reduced building lifespan.
It's a vicious circle and the Leeds market could face a few stunted years of growth while developers seek solid guarantees through several pre-let agreements before they even pick up a spade.
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