The credir crunch, now elevated to crisis status, continues to bite. As banks falter and the economy slows, the impact will be noticeable across all sectors of design, but particularly commercial interiors and workspace design. The images of Lehman Brothers employees packing their boxes and its vast City office lying empty are very much a portent of things to come.
According to the most recent commercial property survey published by the Royal Institute of Chartered Surveyors in July, demand for commercial property has fallen to its lowest level in a decade. Office space is among the worst hit, with demand now at the lowest levels in the survey’s history. Things haven’t improved since July, either. RICS senior economist Oliver Gilmartin says ongoing financial uncertainty, and the general unavailability of credit, means many in the business community are re-evaluating their requirements for commercial property space. ‘Business investment is very subdued; it’s more about consolidation than expansion,’ says Gilmartin.
Designers working in the sector confirm this trend. According to Robert Myers, associate at Sheppard Robson’s interior design division ID:SR, companies are staying put, consolidating to single sites and looking for ways to save space. Consultancies are seeing a sudden shift in their work, with strategic, space-planning work superseding more creative functions. ‘The emphasis is away from branding and physical look, and much more towards tightening belts and getting the maximum efficiency from a property,’ says Myers.
BDG Workfutures joint managing director Phil Hutchinson agrees. Refurbishments for purely aesthetic reasons are out, he suggests, and updating furniture and finishes is low on the agenda. ‘What we are finding is that work is now geared around solid business needs; finding ways to provide flexible work space that can accommodate both growth and shrinkage. The ability to resize is important,’ he says.
Myers believes this need not be a desperate time for design. Designers, he says, are well placed to help companies evaluate how they can best use space and identify real efficiencies. ‘Many workspaces aren’t as efficient as possible,’ he says. ‘The industry norm is that only 60 per cent of space is well used. The ratio of people to workstations is key, and isn’t always right.’
He points to ID:SR’s work with Newham Borough Council as an example. A project is underway to consolidate the council’s offices from 25 facilities into one central campus at London’s Royal Albert Dock by next March. ‘The move will see 2500 staff using 1800 working positions,’ says Myers. ‘Making the workstation as efficient as possible can have a big knock-on effect; at Newham Borough Council it’s planned that workspace efficiency will run at 90 to 95 per cent.’
This drive for efficiency has seen flexible working growing in popularity, with desk-sharing and home working becoming the norm, even in industry sectors that have adopted more traditional approaches in the past. At Newham Borough Council, ID:SR has introduced a ‘neighbourhood’ floor concept, which provides shared space and ‘collaboration facilities’ designed to support new ways of working.
And BDG Workfutures, which has worked with City and banking clients such as American Express, Barclays, Citigroup and Dresdner Kleinwort, is noticing a similar trend. It is currently working on a project with a high street bank to help it introduce more flexible working strategies, such as desk sharing. ‘Our financial sector clients are starting to adopt flexible working strategies and we haven’t seen that approach in the financial sector before,’ says Hutchinson.
Both Myers and Hutchinson agree that one area that is staying high on the agenda for most companies is sustainability. The latter points to advertising agency Joshua as an example. BDG Workfutures revamped the agency’s offices and was asked to reuse materials where possible. Timber was recycled and chairs recovered. ‘It’s about saving money and having an eco-ethic,’ says Hutchinson.
Opportunities clearly still exist for designers working in the sector, though the nature of both projects and clients is changing. Landlords and developers are now more likely to invest in design in a bid to lease their space. RICS data shows that available office space in central London is rising at the fastest pace in the survey’s history – and to a record high. According to Gilmartin, some 280 000m2 of space is now available in London alone. ‘We’re seeing that landlords are starting to offer inducements to tenants as the rental market deteriorates,’ he says. Brettenham House, on Lancaster Place in London, is one example of this. The building was leased to Thomas Cook this month, and inducements included a 12-month rent-free period on a ten-year lease, along with a contemporary refurbishment to the entrances, reception and common parts.
But no one is under any illusion about the challenges the credit crunch is placing on the design industry. Workspace projects are generally large scale and long-term, and designers are aware that the full effects have yet to be felt. ‘It hasn’t really hit home yet,’ says Myers. ‘The next six months will be absolutely key to understanding and planning for what the future holds.’