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Commercial Property An independent publication from www.canongate.org

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SPF’s commercial property analysis

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Distributed with The Times Scotland 30 November 2017

Mega-trends shaping the future

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A global city under pressure

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On the cusp of a revolution

‘Real estate is just the platform for our community’ Eugen Miropolski, WeWork’s European MD, on the company’s expansion


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COMMERCIAL PROPERTY

BRIEFING

30 November 2017

Commercial Property

Business rates call amid fall in sales

Commmercial Property is an independent publication by Canongate Communications

BY WILLIAM PEAKIN

CONTENTS

2 CONSERVATION 3 MEGATRENDS 4 EDINBURGH 5 GLASGOW 6 WORKPLACE 7 TECHNOLOGY

EDITOR Will Peakin 0131 561 7364 will@futurescot.com DEPUTY EDITOR Kevin O’Sullivan 0131 561 7364 kevin@futurescot.com ADVERTISING Julie Neill

0141 465 7640 Julie.neill@canongate.org Katrina Merrilees 0141 465 7652 katrina.merrilees@canongate.org PUBLISHER Hamish Miller 0131 561 7344 hamish@canongate.org COMMERCIAL PROPERTY

Creative Exchange 29 Constitution Street Edinburgh, EH6 7BS www.futurescot.com DESIGN & PRODUCTION

Palmer Watson www.palmerwatson.com TYPOGRAPHY:

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Commercial Property is an independent publication by Canongate Communications distributed in The Times Scotland. All rights reserved. Neither this publication or part of it may be stored, reproduced or transmitted, electronically, photocopied or recorded without prior permission of the Publisher. Commercial Property is published and exclusively distributed in The Times Scotland. We verify information to the best of our ability but do not accept responsibility for any loss for reliance on any content published. If you wish to contact us please include your full name and address with a contact telephone number.

Analysis conducted by the Scottish Property Federation on the most recent commercial property sales figures from July to September 2017 shows that the total value of commercial property transactions in Scotland fell for the third quarter in a row. The figures, released by the Registers of Scotland, show that there was just £693m worth of sales in Scotland during the quarter, down 12% on the previous. The number of sales also dipped by 8% to 1,089. There was also a big drop in the number of £5m-plus commercial properties sold in Scotland, with transactions in this tier at their lowest since the second quarter of 2014; 22 were sold, worth a total of £332m, compared with 32 sales with a combined total of £385m in the previous quarter. “We have not seen three consecutive quarters of negative growth in commercial real estate sales since 2012 and I think that it is a reminder of just how fragile our market is currently,” said David Melhuish, director of the SPF. Groups representing manufacturing, commercial property, retail and tourism in Scotland have called for business rates to be increased by no more than the Consumer Price Inflation index. The switch to CPI from the Retail Price Index (RPI) was endorsed by the recent Barclay Rates Review, and would almost certainly lead to a reduction. Following last

Chancellor Philip Hammond has moved on business rates south of the border

week’s Budget from Chancellor Philip Hammond, CPI is being introduced for ratepayers in England from next spring. The industry groups told the Scottish Government this week that keeping rises in line with RPI would put businesses north of the Border at a competitive disadvantage. Business rates director at BNP Pari-

bas Real Estate, Michael Harkin, said: ““Many Scottish ratepayers are already paying higher rates than their counterparts in England due to the higher level of Large Property Supplement (LPS) which is applied to properties with a RV in excess of £51,000 - 2.6p in Scotland v 1.3p in England. “Hopefully, in the upcoming Scottish

budget, the finance secretary Derek Mackay will take the opportunity to reduce the level of the LPS, as recommended in the recent Barclay Review of Business Rates, as well as proposing a change from RPI to CPI in line with England. Anything less will leave Scottish businesses at a competitive disadvantage.”

Designing well on the old Architectural conservation as a solution for 21st century challenges BY CRISTINA GONZÁLEZ-LONGO Scotland’s identity is closely linked to its historic buildings, ranking in the Nation Brands Index 12 out of 50 nations for its reputation of being rich in cultural heritage. The historic environment is also very important for Scottish economy and society: according to the 2016 Scotland’s Historic Environment Audit it contributes in excess of £2.3 billion to Scotland’s economy and it is good for our health and well-being. The Climate Change (Scotland) Act 2009 sets the targets to reduce greenhouse emissions by 42% by 2020 and by 80% by 2050. The sensitive conservation and continuous use of historic buildings is crucial to meet these targets. The occupation and use of buildings accounts for approximately half of the UK’s CO2 emissions and 80% of the housing stock that will be inhabited in 2050 already exists. The Scottish House Condition Survey (SHCS) has also established that around 500,000 dwellings (one in five in Scotland) are more than 97 years old and traditionally built, with 68% of them presenting disrepair to critical elements. Scottish Traditional Building Forum has also estimated that 97%

of stone buildings in Glasgow require some repair by 2020. We also know that the demolition of old buildings uses more energy than their conservation. Dublin City Council commissioned a study comparing the cost of retaining and reusing the buildings with the cost of demolition and rebuilding in the same site. It concluded that constructing new buildings is more expensive except in situations where the extent of building repair and refurbishment required is extremely high. English Heritage has also estimated that the costs of maintaining and occupying a Victorian terraced house, when considered over a 100-year period, are 30% cheaper than those of a house built in the 1980’s. The Heritage Lottery Fund has found that commercial businesses based in the historic buildings of major cities are more productive and generate more wealth than those based in new buildings.

consumption in buildings are focus on the installation of new energy efficient systems. Although some new systems may always be needed, the priority should be on the existing architecture and fabric of the buildings, their analysis and understanding, not on particular systems or technical solutions which may or not be suitable. Above all, we should improve the energy efficiency of heritage assets without compromising their character and value, and architects and other professionals specialised in conservation should ultimately design and assess the intervention, minimising the need for additional systems. Queensberry House, a Grade-A listed building forming now part of the new Scottish Parliament complex in Edinburgh was considered the finest townhouse in Scotland at the

ALL THESE compelling facts do not

have however at the moment direct translation in funding, business, professional knowledge and educational provisions. The repair and maintenance of existing buildings constitutes approximately one-third of all construction work. Historic Environment Scotland awarded grants in the last ten years of more than £140 million that assisted repairs of a value of over £591 million; private investment accounts for three quarters of all funding for the historic environment. In terms of professional knowledge, most of strategies to reduce energy

“Businesses based in the historic buildings of major cities generate more wealth than those based in new buildings”

end of seventeenth century. It arrived in a very poor condition at the end of twentieth century due to a series of inappropriate interventions and spoil, to the point that even the bolection stone mouldings of the fireplaces were removed. But the quality of spaces was there and the walls could be exposed to proclaim their importance. THE BUILDING was initially at risk to

be demolished as the Spencely’s report considered its conservation and conversion to offices for the new Parliament to be “not value for money”. After a painstaking effort it was possible to conserve what was left of its fabric, avoiding any further damage and designing new contemporary interiors rather than reinstating them without material evidence. It is now proudly sitting between all the new buildings of the complex, providing a comfortable working environment and a direct link with Scotland’s historic environment. Unfortunately, historic buildings are sometimes not seen as architecture, only as untouchable archaeological artefacts or as building fabric. History demonstrates that architectural design is an active agent for conservation and architectural conservation should be, first of all, an architectural project, not just the repair of the fabric. Dr Cristina González-Longo is a RIBA Specialist Conservation Architect and Director of the MSc in Architectural Design for the Conservation of Built Heritage, Department of Architecture, University of Strathclyde.


BRIEFING

30 November 2017

COMMERCIAL PROPERTY

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Engineering the future ‘Mega-trends’ shaping our built environment

Immersive technologies will allow construction professionals to review design proposals and evaluate the potential occupiers’ experience before they are built © HOARE LEA

BY ASHLEY BATESON Over the next ten years, we will see a number of key trends influence the design and quality of the built environment. Most of these changes will enhance our lives and improve productivity. But it is necessary, also, to sound notes of caution on how these are implemented to make sure people’s needs aren’t compromised by the disruptions we face. Broadly speaking, there are five so-called mega-trends that will impact the future of the built environment. First, the ‘Internet of Things’ (IoT) will improve our capacity to monitor and operate buildings. We will see enhanced integration of hundreds of devices including sensors, controls, switches, and our personal devices, to create a networked built environment (see page 7). The use of IoT in buildings has been growing 20% per year, but this will accelerate as the functionality of devices broadens and manufacturing costs go down. The internet is disruptive in a number of ways; not only because we can, for example, install cheap Wi-Fi cameras and energy meters, but also because it allows people to work differently. Increasingly, work will be something you do rather than a place you go. Coffee shops have become pit stops for catching up with emails and home working is becoming popular. This provides workers with freedom and flexibility, and can improve productivity. However, it also means that employers will have to ensure workplaces are attractive to encourage face-to-face collaboration and team interaction.

rooms and operate a range of facilities. Intelligent buildings become selflearning to the point where individual needs can be predicted based on the analysis of occupancy profiles and preferences, measured by movement sensing and data collection from people’s personal devices. In a large workplace, for example, heat maps will tell staff where they can find empty desks or whether air quality is better in certain areas. Visitors will no longer have to ‘sign in’ when they enter a building because face recognition technology will confirm their identity.

THE SECOND mega-trend is the rise in intelligent buildings. This is partly enabled by IoT, and is intended to make buildings more responsive and automated. A few years ago, heating and air-conditioning controls had basic temperature settings. Now, building management systems can adjust lighting and ventilation in meeting

THE THIRD mega-trend is driven by the desire for more sustainable design and construction processes. This will lead to a focus on the circular economy. We will see property developers, constructors and manufacturers increasingly improve resource efficiency and reduce wastage. Some good progress has already been made in the con-

struction sector. The sector currently reclaims 90% of waste generated from building and demolition sites, but that still means there is waste, as evidenced by the fact that the construction sector is responsible for a third of UK’s waste sent to landfill. Best practice constructors are targeting 95%-100% reclamation of construction waste. Off-site, or modular, construction techniques and a drive to ‘design for manufacture’ will help reduce waste further and improve productivity. Materials will be better selected for fitness for purpose and designs will consider disassembly and re-use when changes need to be made. The adoption of virtual reality (VR) and immersive technologies will improve the design experience, and avoid mock-ups or show rooms being made. Clients and designers will visualise a building and walk around it (figuratively speaking) before it is built. Developers will use VR to review and

interrogate design options before investing in the next stage of design and construction. Building managers will check access and space for equipment replacement. This will improve the likelihood that building performance and maintenance is optimised. THE FOURTH mega trend in the built environment is the need for resilience in an ever-changing world. It encompasses continuity of services, as we become dependent on electrical infrastructure and networks. Increasingly, developers will consider the need for power storage if utilities can’t ensure security of supply and back-up strategies. Climate change is a threat to property resilience as temperatures are predicted to get warmer, flooding will be more likely and extreme weather events will me more frequent. Finally, the fifth mega-trend is in health and wellbeing in buildings. A collaborative research project called

‘wellness together’(wellnessandwork. co.uk) supported by Hoare Lea, amongst others, demonstrates a strong correlation between the quality of a workplace and the wellbeing of the staff. Good facilities in comfortable surroundings, with good light and ventilation, increase happiness and improve productivity. Wellbeing that can be measured will increasingly drive the commercial property sector. Landlords and employers who do not embrace this will find it harder to attract and retain good people. These megatrends are driven by a combination of technological, environmental and social change. Property professionals, and the property supply chain, will need to make sure that people’s needs are at the centre of change. Ashley Bateson is a Partner & Head of Sustainability at Hoare Lea LLP (hoarelea.com).

Glasgow’s new satellite business district takes shape BY WILLIAM PEAKIN Work is well underway at Magenta, Glasgow’s new satellite business district. Comprising 1.2 million square feet, Magenta will become one of the UK’s largest business parks. It is positioned on 27 acres, next to the River Clyde and M74 motorway network and just two miles from Glasgow’s city centre and 15 minutes from Glasgow Airport. The first building at Magenta – Red Tree Magenta – has recently ‘topped out’ and is due for completion in summer 2018. The four-storey, 40,000 square feet building will provide Grade-A business suites ranging in size from 100 to 7,125 square feet. It is aimed at encouraging the growth

of SMEs and collaborative working and marks the third Red Tree business incubator in the Clyde Gateway area, joining those at Rutherglen and Bridgeton. The building, designed by architects Archial Norr, will be attractive to companies in the media, communications, IT, training and engineering sectors. It will benefit from superfast broadband and will offer up to a gigabit of bandwidth. As well as the business suites, the building will also feature a conference room, meeting rooms, breakout spaces, kitchen areas, a café and a 70-space car park - offering accommodation to suit the needs of a solo business looking for desk rental, right up to a full office.

Magenta is being developed by Highbridge Properties, a business park specialist who have successfully developed over 13 million square feet of office and industrial space, including Cobalt, the largest office park in the UK. With the current market for Grade A office space in Glasgow city centre one of high demand, low supply and no speculative new-build development, the Magenta development offers the best of both worlds. As well as significant savings compared to similar newbuild offices in city centre locations, easy access to a wealth of new housing, open spaces and all within a short walk to the city centre along the River Clyde, companies looking to move to Magenta could be in the pink!

Magenta, a compelling option for businesses


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COMMERCIAL PROPERTY

MARKET REPORT

30 November 2017

Edinburgh, a global city in demand The capital needs to look beyond its boundaries to compete BY WILLIAM PEAKIN Edinburgh should “re-align itself to focus more on opportunities outside its immediate boundaries to fully establish itself as a global city”, according to research from Savills. The report, featured in The Times Scotland earlier this month, highlighted specific pressures on the commercial property sector. With 7,100 new office-based jobs forecast in the next five years, 3,000 new households being created annually and a booming tourist economy, “expansion and infrastructure investment are required in order for Scotland’s capital to meet its full potential”, concluded Edinburgh: a global city in demand. The report said that while development west of the city bypass and the new Queensferry Crossing will provide extra space for corporate occupiers,

in the long-term “a strategic approach will be required to pick off sites along the city boundary for further development, supported by major infrastructure investment”. It said that rental pressures and a shortage of appropriate space in the city centre had seen the number of office leasing deals in Edinburgh’s out of town markets more than double from 20 to 53 between 2009 and 2016. “Scotland’s capital is on the brink of a grand expansion on a number of fronts,” said Nick Penny, head of Savills in Scotland, “from the gentrification of the east end, which has been turbocharged by the ambitious St James development, to the rapid residential developments that will reach well beyond the current city limits in almost every direction. “Edinburgh needs to have a very different structure and shape of the next phase of growth, which brings exciting opportunities for the city, allowing it to potentially compete with New York, London and Tokyo for economic investment, tourism and new populations. But it also brings its challenges,

From here, everything looks fine

not least how to cater for demand whilst maintaining the quality of life and dynamism of the city.” THE REPORT points out that Edin-

burgh is home to more FTSE 100 companies than any other UK city outside London, and the city attracted £1.2bn of commercial property investment last year. But the lack of prime Grade A office space has the potential to push rents as high as £34 per sq ft for a top floor suite in the city centre by the end of this year, meaning that more space is urgently required. “With the likelihood of a second independence referendum receding, and the potential of a softer ‘Brexit’, Edinburgh is looking like a great place

to do business, live, visit and invest,” said Penny, “but developing the appropriate commercial and residential space is key to unlocking growth. As a city, we need to think of Edinburgh as somewhere with looser boundaries and explore, within reason, where beyond the bypass is appropriate for expansion.” The report said that the office market remains “structurally undersupplied”. Average take up volumes in the past five years have reached 623,000 sq ft, and it forecasts 2017 take-up to exceed this by at least 20%. Grade A availability stands at only 259,000 sq ft, enough to cater for around one year’s worth of Grade A demand. With 100,000 sq ft of speculative of office

development under construction, Grade A of office supply will remain scarce. It has the potential to push on new build rents to £34 per sq ft for a top floor suite in the city centre by the end of this year. Rental pressure and shortage of space in town has seen the number of office leasing deals in the out-of-town markets more than double from 20 to 53 between 2009 and 2016. Standard Life took a lease of 31,000 sq ft at South Gyle Broadway this year and Savills expects to see continued growth around Edinburgh Park as the airport expands. Rents have risen from £17 per sq ft to £22 per sq ft over the past five years, but still remain at a discount compared with 2007 levels.


REGENERATION

30 November 2017

Clyde Gateway, the home of business Midway through a 20-year plan, area’s rebirth has reached a tipping point BY WILLIAM PEAKIN “Its combination of location, minutes from Glasgow city centre with easy access to the motorway and three train stations, its technical specification, with Grade A office space and gigabit bandwidth, and - at around a third of the cost of the city centre - its value,” said Fionna Kell, “is very compelling.” Kell, inward investment manager at Clyde Gateway, had just finished presenting at Scotland Build 2017, the two-day construction expo at the SEC Glasgow last week and the passion with which Kell outlined the area’s renaissance to delegates, lit up the room. “It’s a 20-year project and we’re midway through,” she said. “But the first five years was, literally, all about below

the surface; reclaiming land that had been so damaged by past industries. Their 50-year decline, and the associated disinvestment, also meant that the area had lost its connection with the city. Now, as well as the visible signs of industrial rebirth, we’re building that connection again.” Established in 2008 following the announcement that Glasgow was to host the 2014 Commonwealth Games, Clyde Gateway has seen more than £1.5bn invested from both the public and private sector in the regeneration of 840 hectares across the east end of Glasgow and part of South Lanarkshire. Working in partnership with Glasgow City and South Lanarkshire councils, Scottish Enterprise and the Scottish Government, Clyde Gateway covers an expansive area with opportunities existing for all types of businesses, from international firms looking for the ideal location to trade, to SMEs which require a modern but cost-effective location. A number of technology, media, energy and digital firms, have already

COMMERCIAL PROPERTY

Rooted in the community, business has a bright future in the area

chosen to call it home. But as well as pitching Clyde Gateway’s merits to the private sector, Kell is also keen to nurture interest from the public sector, pointing out that organisations choosing the area will, as well as being in a prime location, be supporting its regeneration and Scottish Government’s targets for social justice. “The hard work is really paying off,” said Kell. “We’re seeing a real appetite from businesses wanting to move to

Clyde Gateway, attracted by the quality of business space, a prime location with excellent transport links and cost savings compared with city centres across the UK. I think we have reached a real tipping point in its fortunes.” There is accommodation to match the needs of any size of business, ranging from smaller multi-let office spaces such as Red Tree Rutherglen to larger industrial spaces at Clyde Gateway East, adjacent to Junction 2a of the

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M74, where work has finished on a new 27,500 sq ft speculative unit here, which has already had a healthy level of interest. It is the only manufacturing location in Glasgow with a smart electrical grid, making it greener, more efficient, secure and reliable. For other businesses that want to bring in bigger teams, larger space options are available at Rutherglen Links Business Park and The Albus in Bridgeton. “The success story of Clyde Gateway speaks for itself,” said Kell. “Large employers like Police Scotland have reaped huge benefits from locating more than 1,200 administrative, finance, and IT staff here. Other significant dynamic and creative businesses, including SPIE UK, Glacier Energy, MadeBrave, Peebles Media, BT and Cloud Cover IT now call Clyde Gateway home.” Clyde Gateway’s reputation as a business location is growing all the time, not just because of the excellent transport links but also due to the business support and superfast broadband they provide. Infrastructure and connectivity are major drivers for the industrial property market, so there’s no doubt that the completion of recent improvements to the Raith interchange and the motorway network to the east of Glasgow has enhanced the area’s attraction and competitiveness even further. The strong demand for the high quality industrial property and Grade A office space that Clyde Gateway offers, combined with a continued lack of supply from the city centre, will ensure that the next chapter in Clyde Gateway’s success story looks bright.


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COMMERCIAL PROPERTY

COVER STORY

30 November 2017

When the office becomes a platform WeWork’s Eugen Miropolski tells Commercial Property about its plans for the UK

WeWork has 17 spaces around London; next month it opens in Manchester and has plans for other UK cities.

BY WILLIAM PEAKIN It was a symbolic moment for both the commercial property and retail sectors, and a bold statement from a company reinventing the way people work. Last month, the Lord & Taylor Building, a New York landmark on Fifth Avenue in Manhattan, a “676,000-square-foot temple of urban commerce”, as The New York Times described it, was sold to WeWork, a seven-year-old start-up, for $850m. The building’s owner, Hudson’s Bay, founded in 1670 and the oldest company in North America, has 480 stores around the world, including Saks Fifth Avenue and Galeria Kaufhof, the largest department store group in Germany. WeWork currently has 170 locations across 56 cities and 17 countries. The shared-office provider bought the building to serve as its new headquarters, and it paid a 30% premium on an official valuation from July last year. Lord & Taylor will remain, however, renting a quarter of the building for its pared down store. Part of the deal involves WeWork leasing space at other Hudson’s Bay locations, in Vancouver, Toronto and Frankfurt. When the deal went through, Hudson’s Bay had a market capitalisation of $1.7bn. Earlier this year, WeWork’s most recent funding round gave it a private market valuation close to $20bn. “It’s a very provocative deal, but not a surprise,” Bruce Batkin, chief executive officer of Terra Capital Partners, a commercial-property lender, told Bloomberg. It was, he said, simply a sign of the times, in which commercial property is being reconfigured to match the way people live and work. Office layouts are getting smaller, and so are retail spaces as more people shop online. “While co-working outfits like Regus have been around for decades, WeWork is now synonymous with the office-sharing phenomenon it helped popularise,” wrote Rey Mashayekhi, a reporter on the Commercial Observer. “WeWork has gobbled up tens of millions of square feet of office space,

changing the complexion of major office markets and epitomising how the modern workplace must evolve to serve today’s workforce.” He added: “Its offices are spacious, comfortable, open, distinct in their design and highly amenitised; every office landlord and broker in the world now knows how important these traits are in drawing the creative, tech and information-oriented companies - often staffed and helmed by millennials - that are increasingly driving the economy.” BUT IT’S not all look and feel; WeWork is harnessing the data it has collected over recent years to organise the office around its users. It knows, in real time, how its spaces are being used and what maintenance is required. Increasingly, smart furniture will respond to individual requirements, recognising who is at the desk through their mobile phone. Software will predict and respond to the pattern of how an office space is used. That expertise is in itself generating new products which WeWork is, or

will, offer to customers. They include ‘space as a service’, a spin on software as a service, where WeWork provides design, construction, and management services to enterprise clients; the licensing of office management software it has developed; and on-site “human community managers”. The company has dubbed this suite of products, “Powered by We”.

“We hope WeWork can re-establish some of the human connection we have lost through the digital age” Eugen Miropolski

Eugen Miropolski is WeWork’s managing director for Europe, Israel and Australia, based in London. “Our mission,” he told Commercial Property, “is to create a world where people work to make a life, not just a living. Going back centuries, the residents of urban areas were brought together in part through town halls, gatherings in taverns, cafes and open spaces to hash out the subjects of the day. We would like to be a place where people can come together, talk, discuss new ideas, and innovate in a collaborative way.” The company has 17 buildings operating in London, and another 15 planned. “We’re excited about bringing WeWork to more cities around the UK soon,” said Miropolski, who previously led Airbnb’s growth in Europe. “We’re constantly expanding to meet strong demand from creators for community-driven workspace in Europe, and next year looks busier than ever.” What was wrong about office space before WeWork? “It’s not that there was anything wrong about traditional office environments,” he said, it’s that

there has been a macro shift toward a new way of work - one focused on a movement towards meaning. How and why people work, live and play is changing. More people want to work on the projects they’re passionate about in an energetic environment where others are also working hard to bring their ideas to life.” WeWork is accelerating this movement, said Miropolski. “We do this through community and collaboration. We think a community works best when it’s a mix of start-ups, freelancers, small businesses, and corporations, or enterprise companies. Small companies have always wanted to be big, but now big companies increasingly want to act like small ones. “Real estate is just the platform for our community. We hope WeWork can help our members to re-establish some of the human connection we may have lost through the digital age. When we started out, there were just a handful of co-working spaces. The fact that the sector is expanding means there’s huge demand for this new way of working.”

Flexibility, dynamism and wellbeing BY WILLIAM PEAKIN There is a polarisation in office space provision, according to Jonathan Steel, Joint Head of Real Estate Occupier Solutions at BNP Paribas Real Estate. “Flexibility and agility is key,” said Steel. “there is uncertainty around markets and the required headcount to service a business. There has been a move over the years to leasehold rather than freehold and we have seen a reduction in the average length of leaseholds. And, more recently, there has been a rapid expansion in serviced offices.

“For example, if you a big Scottish energy company with your headquarters in Glasgow, you are looking out over the next 20 to 30 years and want certainty around operations and employment, and economies of scale you would consider holding as ‘core’ and own,” he told Commercial Property. “But if you are looking at the energy business in Europe, in terms of having sales, marketing and finance operations located there, you may want to opt for a flexible solution that can respond to any potential changes in legislation, regulation and demand.”

Technology is revolutionising how, where, and what we do at work, said Steel. More than ever, occupiers require flexibility, while investors continue to seek income security and to protect capital values. “The good news,” he said, “is that occupiers are prepared to pay a premium for space that meets their physical and technological demands and is able to flex in line with their changing business needs.” Steel cites five key corporate trends: FLEXIBILITY: Forward-thinking land-

lords are beginning to innovate and provide flexibility to tenants. DYNAMIC SPACE: More services and spaces that blend time and place, work and private lives. These multifunctional places will be used for fun, leisure and study, according to the needs of the user. WELLBEING: This begins with the choice of location within a city, and extends through architecture to the design of workspaces. LOCATION: Where do employees want to work? Investors need to think carefully about what makes a

compelling location, ease of connection, leisure etc.

RESPONSIVE BUILDINGS: The drive for buildings designed to cut energy bills and reduce CO2 emissions has been turbo-charged by corporates and policy makers, and has brought big improvements. The future may be one of cognitive and responsive buildings, equipped with artificial intelligence that enables them to learn and autonomously improve their performance.

realestateforachangingworld.co.uk


TECHNOLOGY

30 November 2017

COMMERCIAL PROPERTY

The tech transforming ‘comm prop’ BY MARK BEGBIE Have you ever returned to work from lunch to find lethargic colleagues sipping coffee, or even dozing at their desk? If you work in an office, you most likely have. It’s the well-known afternoon slump – often thought to be the result of over-indulgent meals or the consequence of a morning’s hard work. That, however, is a misconception – one that has a real impact on productivity for countless businesses and, collectively, the entire economy. It’s one of the many enduring problems faced in offices across the world that are being tackled by technology coming out of Scotland. A new generation of property technology companies, or proptech as they’re coming to be known, are emerging across the country. One by one, their technologies will change commercial property for the better, whether it’s how much office space a business leases, how a clinic manages its rooms, or enabling automated control of buildings. One of them is Cumbernauld-based Gas Sensing Solutions (GSS), which is taking on the post-lunch snooze. Part

of the reason it’s such a problem is that modern building regulations have focused on energy efficiency, which has the effect of reducing the proportion of fresh air getting in. This can lead to a build-up of carbon dioxide in buildings through the day – making occupants increasingly tired. To tackle the issue, GSS worked with Glasgow Caledonian University and CENSIS to develop a smart building energy management system which continuously monitors air quality, predicts a looming rise in CO2, and takes action to improve it. The system can even estimate how many people – if any – are in a room and adapt its behaviour to make the occupants more comfortable whilst maintaining energy efficiency, by adjusting ventilation and temperature. Yet, productivity isn’t just an issue for staff – it can be a challenge for buildings or equipment too. In these cases, it’s more often referred to as availability or utilisation – a perennial problem for organisations seeking to achieve the best value and service delivery from their facilities. With 500-million sq. ft. estate and its almost countless moveable assets, the National Health Service is no stranger to this.

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Ever returned to work from lunch to find lethargic colleagues?

Analyses suggest that many facilities, including those in the NHS, could deliver significantly more if there was a better way to monitor and manage their use. Scottish start-up Beringar is taking this problem head on, by developing a non-intrusive sensor, and associated analytics, to understand facility and asset utilisation. The company is already working with the NHS to improve its understanding of how its buildings and equipment, such as hospital beds and crash trolleys, are used. Transmitting data wirelessly using a “LoRaWAN” long range, low power, wide-area network – a type of Internet of Things (IoT) network – the sensor replaces traditional methods of measuring and assessing the use of buildings, such as clipboard surveys. It accurately counts the number of people in a room, recording occupancy levels, and identifies trends in the way areas are used, without sending an image of the people. While the NHS could be the big-

gest beneficiary of this technology, it could also be used in a range of other scenarios, including higher education, leased offices and by construction firms. In fact, several of Scotland’s universities are already seeing the benefits of the IoT. In Inverness, for example, a consortium of organisations – including CENSIS, Stream Technologies, and SPICA Technologies – installed LoRaWAN connected indoor environmentalmonitors at the £13m An Lòchran building on Inverness Campus. The building is jointly owned by Highlands and Islands Enterprise, the University of the Highlands and Islands, and Scotland’s Rural College. Monitoring a range of data – temperature, humidity, CO2 levels, noise, and light – the network has helped its owners and occupants make better decisions about how they manage the building, through data visualisation and analytics. For example, they could tell which rooms were occupied, which weren’t, and adjust conditions remotely

to make them more comfortable. Combined, these three company collaborations demonstrate the colossal changes that could be on the way for property owners and occupiers. The ability to monitor the occupancy levels of rooms across an entire estate could be transformative for a university or other large organisation, while keeping CO2 levels in check could lift worker productivity. These are just some of the ways in which technology will change commercial property as we know it. Between them, they could allow organisations to make smarter decisions with their space, boost productivity, and cut unnecessary costs for occupiers and landlords. There are serious benefits for everyone to realise if they implement it the right way. Property is on the cusp of a tech revolution; it’s now up to the industry to embrace it. Mark Begbie is business development director at CENSIS (censis.org.uk).


Profile for Canongate Communications

Commercial property 30/11/17  

Commercial property 30/11/17  

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