Shrinkage 'ill-advised'

Savills agent questions ‘knee jerk’ cuts in office space

Haymarket Edinburgh

Haymarket Edinburgh is under construction

A property agent has questioned the ‘knee jerk’ reaction of some companies to reduce their office space in the wake of the pandemic.

Mike Irvine, director in Savills office agency team in Edinburgh, says that while home working will remain a feature of working life for some time firms are “ill-advised” to make short term decisions.

A number of companies, including big financial services firms, have said they are reviewing their office requirements following a successful six months of having thousands of staff working from home. High street fashion chain Next said today that “the experience of having to work from home has opened our eyes to new and better ways of working.”

Keith Skeoch, who recently retired as CEO of Standard Life Aberdeen, last month said its offices will be working at no more than 40% capacity in the near future and that the shift to home working has caused “gloom” to descend on the commercial property sector.

Mr Irvine acknowledged the impact of the pandemic on work patterns, but believes the sector will rebound.

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“It was no surprise that Q2 take-up in Edinburgh city centre was significantly below average levels as the Covid-19 pandemic caused take-up across all major UK office markets to fall,” he said in an update on the market.

“However, we are confident that once a level of certainty returns to the UK economy, occupier activity in Edinburgh will resume to more normal levels.”

He said reduced levels of take up are likely but rents on quality product will remain strong, given the constrained pipeline.

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