HR & Management

Making the workspace work for tech sector landlords

6 min read

16 January 2014

Modern work practices, the use of mobile technologies, flexible working and a knowledge-based workforce are now becoming increasingly at odds with conventional office space.

According to figures from the Royal Institution of Chartered Surveyors, tenant demand for commercial properties has been steadily growing and available space contracting. In fact, the gap between the two now stands at its highest level since the start of its dataset in 19991. However, new spaces are needed. By 2016, forecasts suggest there will be around 300,000 people who’ll be working in the tech sector who will all need to find a suitable office space.

Tech companies such as Yahoo! have taken steps to ban employees from working at home, saying that speed and quality are often sacrificed – and the best decisions and insights often come from “hallway and cafeteria discussions, meeting new people and impromptu team meetings”.

In order to engage employees, improve business performance and spread ideas, tech businesses need to provide optimal working environments for their employees that support a new style of working. New design solutions and strategic changes in the layout of offices can improve employees’ experiences and therefore drive success of a business. Increasingly, employees require a choice of spaces that fit their individual work pattern rather than a static work station used for all tasks.

Workers across all industries who have greater flexibility report greater job satisfaction. Being presented with a spectrum of choices of where and when to work will mean that employees will be more innovative and perform better4.

The office environment needs to support employees to perform well by creating tranquil thinking spaces, vibrant areas for socialising and optimum learning zones. Modern buildings need to offer the right mix of amenities, space and support systems to make them attractive to all types of occupiers. 

What does this mean for landlords?

New working styles, particularly in the technology sector, pose a challenge to landlords. Landlords need to attract the right type of tenant to ensure their building is occupied and not empty, their income stream is protected and they enjoy a reputation as forward-thinking and considerate.

1. Provide space to meet the expectations and different demands of tenants, whatever their age

The tech sector in particular is renowned for attracting young people and research has shown that the younger the workforce, the more dependant employees are on physical comfort at the workplace5. Somewhat similar to a home, the landlord will ideally need to offer dedicated zones for various activities, such as meeting spaces, relaxation spaces, space to think and space to focus. These areas need to be adaptable and easily changed to provide different environments at different times of the year, week or even day. The office space will constantly adjust and respond to changing work patterns.

2. Meet the demand for less space from the tenant and organise existing space more effectively

Prime office space comes at a premium. Technological changes mean that tenants will no longer need space for filing cabinets, storage, stationery and so on, but the space previously taken up by these items must be integrated effectively. Tenants will not want to pay for space that is of little or no use to them.

3. Own cloud/wifi systems to offer flexibility to the tenant without compromising security

All tenants expect fast broadband access but IT and cloud connection, connection speed and cyber security are crucial to the technology sector. The landlord needs to own these systems and make them available to the tenant on flexible terms. Tenants will not tolerate disruptions and malfunctions of the IT systems, as this will result in a financial loss and disruption to their business.

4. Have smart building systems and facilities management to monitor the use of the building and the building systems effectively

More people in the same space will put stress on building systems. New systems may have to be installed or out of date ones replaced with modern ones. Real time data provided from consistent measurements of the building systems will result in the fine tuning of electricity and water consumption, increased supplies to the building in times of greater demand and ultimately, the comfort of the occupier. Tenants will expect this as a matter of course and will not be prepared to pick up the cost of building systems management via a service charge.

5. Provide the space and facilities to different occupiers at different times

Individual start-ups may want to mingle and interact, use the same space at the same or at different times. Systems will be needed to measure usage of space, utilities and services provided to ensure a fair charging mechanism.

6. Engage professional advisors, among them lawyers and surveyors, who are up to speed with all these developments to ensure legal documents reflect the practical set up

Legal documents need to be easy to understand, straightforward and quick to produce to ensure that no time, and therefore income, is lost in starting the tenant’s occupation.

Kathrin McClintock is Partner and tech-sector property lawyer at international law firm Taylor Vinters.