When will we see a large-scale return to office working? Will patterns of work change for ever? What are the implications for the city centre? How can retail work to recover from the devastating effects of the pandemic?

Richard Buckley of Business Eye and TLT's real estate partner Kevin Murphy hosted the discussion from NIAVAC's studio in East Belfast and were joined remotely by:

Brian Lavery, Managing Director, CBRE Belfast

Simon Hamilton, Chief Executive, Belfast Chamber

Niall Borthistle, Business Development Manager, Glandore

Laura McCarthy, Senior Asset Manager, Killultagh Estates

Cathy Reynolds, Director of City Regeneration & Development, Belfast City Council

 

RB – Back at the start of the pandemic, we were hearing people almost predicting the death of offices and office working. But there seems to have been a change in those attitudes. What is the view of the panel?

KM – Working from is going to be with us in the future, but so are offices. The office as a central home for a business is still very important. That's been reflected in the market where there have been new development and new occupiers coming into Belfast. That shows both resilience and a desire to have a central office location.

BL – The pandemic has brought office design forward, probably by five to ten years. We're already seeing more green elements, things like bike storage, showers, additional open spaces. We already know that we have to design places where people will want to come in and work. So, rather than offices being dead, I think that the crisis has moved us forward and forced us to think more about good design.

SH – The office delineates work from home and it's good for mental wellbeing. I think there has been a change in attitudes over recent months. Back at the start of the pandemic, working from home had a novelty factor and the weather was great. But working from home became living at work. The break between work and home is incredibly important for our health and for our productivity. We're social animals, we miss each other and we miss the innovation and collaboration that comes from working together. This is a useful format and it has served us well over the past nine months, but I really do think the pendulum is starting to swing back towards office working.

RB – Niall, this is central to what you do. How do you view the future?

NB – Even before the pandemic, the nature of how people used offices was changing.We've seen that in the rise of flex space. For us at Glandore, our space is design led. We have communal space, open space, collaboration spaces. The pandemic has forces companies who've never embraced working from home to adapt it so that will result in some change. From our own perspective, I think we'll see further growth in the flex space marketplace. Companies want flexibility when it comes to their requirements.

LM – We've been in our office full time ever since we were allowed to return in July. Our view is that property is a people business and it's important for us to be here as a business space developer. Offices will still be the future although the environment will just look a little different. As Brian said, what we're going to see is a better office, not the death of the office. The onus is on people like us, developers, to create a better product whilst taking into consideration that working from home will also be much more prevalent than it used to be, so we're looking at a hybrid way of working for the future. I was lucky to have a preview of Rapid7's new offices in Belfast, an £8 million fit out of 45,000sq ft completely focused on productivity and their employees well being. This has set the standard for the city and should make all developers think about the design of their space to accommodate this hybrid way of working.

RB – Cathy, it's clear that all of this has had a major impact on the city centre. What are your hopes and fears?

CR – I agree, first of all, that the office definitely isn't dead. People want to get back to normal work in some shape or form. It's about people and not about buildings and social and business interaction is really important. Of course all of this has had a negative effect on the city centre and there is no doubt that there are many challenges ahead. However, as Laura has pointed out, there has also been good news from new investors. Going forward, we need to focus on what we talked about pre-Covid and some of the areas of focus and changes that were already happening may not accelerate. Increased city centre living and enhanced connectivity, for example.

RB – Simon, you've been the spokesman for the city centre through all of this. Put what's been happening into perspective for us.

SH – It has been tragic for Belfast city centre. There's no way to dress that up. Footfall has been down to 25% of where it would have been and we've seen how crucial office workers are to the city.

We have to remember that we're not alone. Cities across the country and worldwide are suffering in the same way. Looking to the future, we have to look at encouraging more city living, at having more family friendly leisure activities in the city centre and at cycling and walking infrastructures.

KM – When I started out in my career, incoming companies used to complain about the lack of Grade A office space here. But I think we've stepped up our game significantly. Today's employees want first class offices. We were among the many companies who weren't set up for home working, but we adapted quickly as did a lot of organisations. I think there's bound to be a move towards much more flexible working and days of the 9-5 office might well be numbered. That's not to say that offices will become redundant but we're looking at a mix, the hybrid model is it's called.

RB – So we're looking at higher quality, higher specification office space. Are we well enough equipped as a city?

BL – I think we're well placed, and more offices are coming out of the ground at the moment. We also have to remember that we have a very large public sector here and a lot of public sector offices in the city. It's really important that we get those workers back to offices, and I'd be interested to hear Cathy's views on that. I was pleased to read that PwC intends to get back to office working as soon as it can. That's the kind of message we need from the private sector but just as importantly from the public sector.

CR – We're working to government and public health advice at the moment, but as soon as it's safe to do so, we'll certainly be looking at a return to the office in line with health guidance. I agree with Brian that office occupation is critical to our city centre, not only in terms of development and bricks and mortar but for the contribution their occupants make to the wider economy.

RB – Now that the vaccination programme is underway, is it possible that we'll find ourselves back working exactly the way we used to work in a few months time?

SH – It's a question I've asked our members. We're hearing from big employers about a phased return in April working towards a full return by September. The pessimist might think that September is a long way off, but the optimist homes in on any return to office working. But Brian is right, it's important that the public sector makes a similar move.

LM – We have an office site at Donegall Square South - The Mercantile - and we have been talking to potential occupiers over the last 12 months. Those conversations have become significantly more positive in recent weeks with the vaccination programme underway, businesses can now plan in a way that they haven't been able to do for the past nine months. I am excited about the market for 2021 as so many requirements have been on hold and with so many lease events happening next year, this will trigger activity.

NB – Whether they wanted it or not, companies have had time to take stock. It's been mentioned before but there's no doubt we'll see a lot more flexibility around how employees work and how firms operate. Certainly, as a serviced business centre, we're seeing a lot of enquiries coming through. And I think we'll see a change in atmosphere when we get into the New Year.

RB – Let me shift to retail. On my short drive here this morning, I passed four Amazon delivery vans. Covid has had a huge effect on retail and has helped drive many customers into the hands of the online retailers. What can we do to help bring retail back to life?

SH – A theme throughout the pandemic has been the acceleration of trends. With retail, there was already a trend towards online sales but I don't think anyone expected it to double. I don't see it swinging back again. In Belfast, we've seen Easons go, we've had bad news on Debenhams and Arcadia. To use pandemic language, they all had pre-existing health conditions but government-enforced closures were the final nail in the coffin for them. The policy of locking down, opening and locking down is incredibly difficult for these businesses. We have to work towards a city that is less reliant on retail and that gets us back to the living and leisure we talked about earlier.

KM – We carried out a Retail Agility Report recently and it showed that bricks and mortar retail is still very important and very relevant. But the pandemic has helped a lot of retailers to improve their online offering, and that's a good thing. So, just like offices have to embrace a different future, so does the retail sector. Office space and retail space will blend together more easily.

BL – We've mentioned Amazon. Not everyone is aware that Amazon has built a multi-storey van park at its Titanic base, the first of its type in the UK and capable of holding 470 delivery vans...so we're going to see a lot more of them. Online retailers thrive through their agility and retailers are going to need that kind of agility as well. Those who didn't plan for online are the ones who've fallen by the wayside. Retail can be flexible and retail can be re-positioned. It just needs to happen pretty quickly.

LM – We have six shopping centre assets across the UK and have been working closely with our tenants this year to try to help them sustain their business. What we have seen is some sectors have performed extremely well during this period, the grocery and value led retailers who have been able to trade throughout lockdown and the retail parks where you have ease of access. Where we've felt the pain is in the shopping centres and that's because of the number of fashion retailers who have really struggled as a sector. I believe that retail can and will recover, but we're going to have to look at re-purposing part of our schemes as we simply have too much space and we don't have enough new occupiers coming through.

CR – In the short term, we've looked at things like our Buy Belfast Christmas Market to encourage customers to buy locally online. I do think that it may not be a case of being either online or bricks and mortar, but havinng a complimentary offer. In the longer term, it is about having a variety of uses within the city centre to encourage people to come into it and this should help support the retail sector. This includes more family centric, cultural and leisure offerings as well as city centre living. There appears to be a consensus for the need for additional homes within the city. There is also an increasing interest and a significant number of residential units within the planning system at the moment and purpose built student accommodation on top of that – which is all positive. But it goes further than that and there is a need to consider this in the context of enhanced sustainability, open space, connectivity, pedestrianisation and cycling. We need more than just retail, in other words, to bring people into our city centre.

NB – The pandemic has highlighted our reliance on retail. The old analogy 'Build It And They Will Come' isn't far off the mark. We need to be a bit more imaginative, but change can't be forced. It has to happen organically for it to be lasting. By way of example, we've taken over the old Cath Kidston space to open new facilities for our members.

RB – Let me bring office and retail back together. How can our city centres and town centres be helped to recover? And what role can the Northern Ireland Executive play in all of this?

SH – I think that the private sector is backing Belfast. There are a lot of developments in the pipeline and some of them have the potential to be game changers. What they want to see from government aren't just the big public schemes like the York Street Interchange and the Transport Hub. They want to see investment in Royal Avenue, for example. They want to see progress towards making our city greener. The public sector needs to back what the private sector is doing.

RB – Belfast City Council is part of government at a local level, Cathy. What are your priorities?

CR – Simon is right. Public/private partnership is absolutely crucial. There are joint priorities around connectivity, enhanced public realm and open spaces, increased city living, innovation and digital technology, opportunities arising from the City Deal, etc. The Council is working with DfI and DfC on a study around how best we use our city centre to provide enhanced connectivity, sustainability and support business and communities. Pilot projects have already been brough forward. We do need to have this bolder vision and be able to envisage what we want our city centre to become. As I said earlier, city centre living has an important role to play in that wider vision and we're starting to see real progress on that.

KM – I don't think any part of government is holding things back. The commitment is there and it's a case of maintain progress. The City Deal represents a great opportunity for Belfast. With the goodwill of politicians including local councillors we can make a lot more progress. In fact, I think we can lead the way as a city.

BL – We launched the Weaver's Cross development at the end of the year and it is really positive story of much-needed infrastructure. Here is a government-led scheme which is actually coming out of the ground, so it's a positive message. Ease of doing business is hugely important. We still need to look at our planning system and make it much smoother and more effective. If we don't, investors will simply move on.

RB – Can we take the opportunity of the Covid crisis to change our city centre for the better?

KM – I really do think so. We could simply end up back where we were, but I don't see that happening. Employers have put a lot into making remote working work for them and I can't see that going away completely. We also saw visible environmental improvements during lockdown and those can't be thrown away. I think we will be doing things differently.

SH – A lot of the changes we want to see aren't new ideas. They've been around for a while. Such has been the trauma of what we've been through over the past few months that we're keen to embrace real change going forward. We'll certainly be a lot less resistant to that change. It's going to be difficult and expensive to do some of these things, but there is a real drive and an impetus for change now and that can only be positive. We've been through worse than this, we'll come out the  other side and, if we embrace change, we'll come out all the better.

BL – We've certainly come through change and we've proved ourselves resilient. We're looking forward now to an energised office market and to a changed but recovering retail sector. We also have to get our tourism and hospitality industry back on its feet again. These are challenges that we succeeded at beforehand and we'll succeed at again.

LM – I'm feeling very positive about the markets in 2021. We're going to take on board the lessons that we've learnt. We've had to adapt at a rate of knots that we'd never have anticipated. To put it simply, we have to take those lessons and apply them going forward as we look at how we improve our retail and office environments and move back to some kind of normality.

NB – Belfast has punched above its weight in a lot of different ways and it can continue to do so. Yes, we're going to see changes to the office market and to how we all work. We'll have to take small steps and government can help by making it easy for people to get back to work. It's worth mentioning too that the city's loss has been the suburbs' gain. But this city has come a long way. We can take stock now and move towards a positive future.

CR – One thing the pandemic has shown us is that we all need social contact.  Covid 19 has highlighted many of the challenges that already existed, and I believe there is a general consensus about the need to accelerate many of the collective priorities that existed pre-Covid. Everyone wants to see the city centre bounce back and become vibrant once again and that will require a joined up approach across all sectors.

RB – I think that last question and your responses to it are a good way to wrap us this discussion. On behalf of both Business Eye and TLT, can I thank all of you for taking the time to be with us today.

This roundtable was first published in the Business Eye.

Get in touch

Office, Retail and City Centres - What does the future hold?

Date published

04 February 2021

RELATED INSIGHTS AND EVENTS

View all