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Economy / Jobs

Bohemian Saudis and ex-banker hotel clerks: What happens to a city when its offices die out?

In case you haven’t noticed, the office is a dominant feature of London’s built environment. The same is true of most of the world’s major cities, where jostling multinationals compete for space and the prestige that a plush workplace awards.

But demand for office space may not always be as insatiable as it is today. Digitising workflows, evolving HR policies and eye-watering city centre rents mean that, by 2020, 70 per cent of office workers are expected to work from home, cafes, workspaces, trains and other remote locations as often as in-office. A third will no longer clock into a traditional office at all.

As much as we all require a space to scratch the itch for buzzwords, backstabbing and passive aggressive dialogue, it’s likely these trends will precipitate a decline in the amount of land given over to offices in the capital. The glass towers of Liverpool Street needn’t clot with tight-fitting suits and mid-market perfume. There are – whisper it – other land use possibilities.

So what happens when the offices go? What does London, and our experience of it, become?

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Residential for the 1 per cent

Dr. Cindy Frewen is an urban futurist and architect. Pointing to the genus of urban regeneration spawned by New York’s 1950s industrial lofts prototype, she believes London’s offices could be heading towards a fate similar to that of the old manufacturing plants of Downtown Manhattan.

“It takes about 25 years to change a city substantially,” she says.Buildings are either beloved and kept for historic reasons, adapted because they are flexible or charming, or demolished for new uses.” Once proximity-to-job becomes a redundant metric for deciding where to live, Frewen predicts city dwellers will shift to clustering around amenities, family and friends. In this kind of urban landscape “character gains traction,” and a city intensifies its orientation around cultural, rather than professional, ley lines.

But she also envisages elite global hubs like London and New York being resilient to an era of adaptive reuse. “Think what it would take to transform $2000 per ft2 commercial office buildings to residential. That’s residential for the 1 per cent. The charm of bohemian lofts has been the younger people and artists who congregate there due to low pricing, location and flexibility.”

If real estate continues to command sky-high prices, mixed use residential-cum-cultural quarters will remain confined to the fringes of the city. Rather than arts alumni converting old offices into bohème workshops, we will more likely see Saudi playboys reimagining them as city centre bachelor pads.

Old, tired – but with affordable housing

Tony Lloyd-Jones, the consultancy and research director at the Max Lock Centre, says that predicting the future of land use is a “mug’s game”. But I managed to coax him into doing so anyway: he anticipates that as office space demand and construction wanes, London will less resemble “a large building site,” and begin to feel “a bit older, more tired”.

If land becomes more affordable, offices could be commandeered to replenish housing supply. “Typically in London,” he says, “there is a repeating cycle of conversion between residential and office space. Major office buildings from the 50s, 60s and 70s have been converted into apartments. This could spread to those built in the 80s.”

The increase in housing stock would bring property and rent prices down further, meaning less people suffer indignities like living eight-to-a-room or paying £500 PCM for a cupboard under the stairs. Down-zoning policies could nudge the capital in this direction: a spokesperson for Sadiq Khan told me the mayor is currently researching the land use opportunities new patterns of working might bring.

There’s an interesting convergence of trends here too. The blank, open halls and floors of a typical office could be the perfect canvas for new, VR-ready forms of residential space. Dr. Frewen imagines future homes as “complete headquarters for living, working and playing” in which we use a combination of next generation technologies to ‘reach out’ to the real world. Nondescript office space – “a blank slate for media experiences” – would smoothly accommodate this kind of lifestyle.

A sovereign elephant

I’ve tried my hardest to ignore the elephant in the soullessly-furnished meeting room. But unfortunately, it’s time to invoke Brexit.

Lloyd-Jones expects the fallout from Britain’s European Union departure to render many predictions worthless: “An exodus of banks and their staff from London would create a wave that would wash across the wider London economy, and probably produce a crash in commercial and residential property markets.”

Such a crash would mollify a key driver of decline in demand for office space: the painful expense of commercial rents in London’s central business districts. As building space cheapens, the pressure on firms to adopt new modes of working eases. In a post-crash London, office space demand would remain buoyant.

Lloyd-Jones foresees any buildings that are converted becoming mid-range hotels that cater for the predicted mass influx of tourists from China, India and other emerging economies. “A sinking pound will continue to attract tourists and increasingly cultural capital is all London will have to sell,” he says. “Which means the cheap foreign labour will still be needed in the tourism and hospitality business.

“But Brexiteers want to keep them out,” he adds. “So maybe lots of office conversions to grubby hotels staffed by out-of-work British bankers?”

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