- Survey of 250 large central London businesses reveals appetite for ‘hybrid’ working
- Nearly a third are considering adopting a hub and out-of-London ‘spoke’ office model
- Brighton identified as most attractive location for an out of London office
- Shortage of high-quality office space in Brighton could hold back potential, with U+I’s Circus Street and Plus X among the few new workspaces
Brighton has emerged as a potential key beneficiary of the UK’s post pandemic future, as central London businesses consider reducing their central London presence in favour of satellite offices as part of moves to adopt permanent flexible working arrangements. However, a lack of new office supply could yet constrain Brighton’s potential, as well as other towns and cities ripe to benefit from changes in working patterns and lifestyles post-pandemic.
Brighton already has a well-established reputation as one of the UK’s best places to live and work and ‘happiest places’ – as well as one of the UK’s most entrepreneurial cities, according to Lloyds. In recent years it has attracted a range of start-ups, particularly in innovation, creative, gaming, digital and tech sectors, earning it the name ‘Silicon Beach’.
Now, according to a survey of 250 senior decision makers in large central London businesses (defined as those with more than 250 employees), Brighton has been rated as the most attractive location in the South East to set up a satellite or ‘spoke’ style office post-pandemic – beating other prominent cities such as Oxford, Cambridge, Royal Tunbridge Wells and Reading to the top spot.
Brighton is therefore set to benefit from many large businesses moving to the city as they reduce their central London office footprint as a result of changing working habits, providing a significant boost to the local economy.
However, Brighton’s potential boom could be stymied by a lack of high-quality office space. A separate survey of 250 senior decision makers in Brighton-based businesses (with 30 employees or more) found that nearly a third (32%) say that a there is a lack of quality office space in the city to support growth. A fifth (24%) said shortage of supply was leading to an increase in office rents.
According to office agent Knight Frank, Brighton has a constrained development pipeline, with long-term demand outstripping supply. Office supply has been partly eroded by the conversion of commercial space into housing through permitted development rights, with Knight Frank regarding the city as ripe for speculative development, deeming it a “build it and they will come” destination for Grade A space.
Specialist regeneration property company U+I is bringing forward two of Brighton’s largest ever regeneration schemes in partnership with Brighton & Hove City Council: the £130m Circus Street and £300m Preston Barracks, which is home to Plus X. Circus Street includes 30,000 sq ft of Grade A office space, designed to attract Brighton’s new generation of occupiers. Plus X is a seven storey innovation hub with state of the art workspace for creatives, scale-ups and large corporates.
While Plus X’s launch last year helped address some of the shortfall of new workspace in the city, just two new Grade A offices are due to complete in the coming 12 months, including U+I’s Circus Street.
The survey, led by U+I and global insight consultant Censuswide, finds that 82% of respondents agree that the pandemic is likely to lead to more central London businesses adopting some form of a hub and spoke office model (creating a smaller central London office hub with satellite office(s) out of central London). 32% of respondents are actively considering this decentralised model for their business.
When asked what locations they would consider as ideal for a satellite office outside of London, the respondents favour Brighton, Guildford and Maidstone in the South; Chelmsford, Cambridge and Milton Keynes to the North and East; and Oxford, Maidenhead and Hayes to the West. Overall, Brighton emerged as the most attractive location, with respondents citing its strong talent pool, quality of life, inclusivity and diversity, good transport links, proximity to London, and lower cost of living (see full results in the media pack).
The survey also suggests there has already been considerable churn within the central London office market due to Covid-19. 30% of respondents stated that they had moved office as a result of the pandemic, a further 34% are considering doing so and 12% would like to move but are tied to a lease. Of those considering a move, 28% said they would do so in order to downsize their central office, using more shared/flexible workspace in different areas, with a mix of remote/home and office working.
The impact of the pandemic on perceptions of central London was also stark, with 42% of respondents agreeing the city would now be less vibrant due to the impact on retail, leisure, and hospitality industries. 40% say the success of remote working had reduced the need for a central London location. Only 13% of respondents say the impact of the pandemic had not led them to reconsider the appeal of central London.
The finding that Brighton is the favoured location of central London businesses for a ‘spoke’ office follows a report by property agent Savills, Brighton: From Hub to Spoke, which highlighted the potential of Brighton to benefit from a shift to a hub and spoke model – with the city able to serve as both as an ideal home for start-ups and scale-ups, and a spoke location for London businesses. In 2020, it was ranked as the second the best city in the UK to start a business by the Unleashing Great British Enterprise report.
High profile Brighton start-ups include Marina Tex, a compostable plastic alternative made from seaweed, whose founder Lucy Hughes won the James Dyson Award for innovation, and crowdfunding platform Shadow Foundr.
Last year high-tech innovation hub Plus X opened with the aim of fostering Brighton’s start-up and scale-up economy, with £5.5m in government funding via the Coast to Capital Local Enterprise Partnership to deliver BRITE, a three-year programme of business and innovation support. Plus X now has 117 businesses in situ, with the BRITE programme providing support for 38 businesses.
Richard Upton, U+I chief executive, said: “No one truly knows how the future of work will pan out post pandemic, but what’s clear is that business leaders are giving a great deal of thought to enhanced flexible working, giving greater agency to employees, improving productivity and work life balance. Like all employers, we’re doing the same, and are exploring options for the future of our own central London based office. As a developer bringing forward major schemes in London, including office space, we firmly believe in the future of the capital. But we think certainly for some businesses, the nature of the office and how it’s used will change, becoming more a hub for creative and collaborative work, rather than the default location where work gets done.
“This survey shows many central London business leaders think the same, with nearly half favouring some form of hub and spoke model or hybrid working. It comes as no surprise to us that Brighton is identified as the number one location for businesses to open an alternative office outside of central London. We’ve long believed in the potential of Brighton, as evidenced in our commitment to the Circus Street and Preston Barracks developments – and it was the strength of the city’s enterprise culture that saw us choose Brighton as home to our first Plus X innovation hub. The only thing that can hold Brighton back now is a lack of supply contemporary office space. This is true of many towns and cities around the UK that have huge potential to benefit from post-pandemic changes in working patterns and lifestyles. The demand is unquestionably there from occupiers and we expect it to only grow as London businesses evolve their office strategies. We will be determined to help support that growth now and into the future.”
Mat Hunter, co-founder Plus X Brighton, said: “Brighton is an outstanding location to both start and build a business and now has a real opportunity for further growth as we move out of the pandemic. For too long the city has been considered by some as a lifestyle commuter hub to serve central London, but it is so much more than that, as the incredible array of entrepreneurs and SME talent in Plus X demonstrates.
“As this survey shows, the trend to much greater flexible working and a shift to a hub and spoke model post pandemic gives Brighton a great opportunity for further growth, expanding as a home for existing entrepreneurial talent and a hub for start-ups and scale-ups, but also as a future location for ‘spoke’ offices for larger central London businesses, looking to attract talent that has moved out of London. The future of the city is undoubtedly bright.”
Sarah Springford, CEO, Brighton Chamber, added: “Brighton ticks so many boxes when it comes to running a business or setting up a satellite office. As well as being well known for its entrepreneurial and creative business community, the city is brimming with innovation and talent thanks to its two great universities.
“Right now business owners are looking at new and more sustainable ways of working, and they want quality office space for collaboration. It’s fantastic to have new workspaces like Circus Street and Plus X and offering workspace to companies at every stage of their journey, from start-ups to established corporate organisations. State-of -the-art workspace is adding a vital ingredient and taking the city’s economy to a new level.”
Councillor Phélim Mac Cafferty, Leader of Brighton & Hove City Council, added: “This is great news for Brighton & Hove. With more people working locally instead of commuting, a better work life balance can be struck, travel and its associated pollution is reduced, as new workspaces help keep talent in the city.
"The city will also benefit from more, high quality jobs – with workspaces enabling our continued and well-deserved reputation as a place where start-up businesses thrive.
"We are celebrating this as a powerful opportunity to help the city punch above its weight as we recover from the pandemic. And we will continue to encourage businesses to choose the city for their satellite offices – and as a location where talent can be harnessed and new jobs and opportunities created.”