Visualise a ‘dream office’ and you’re likely to picture amazing views, plants, soft furnishings and, if you’re so inclined, a beer tap. But are occupiers attracted by these design features? From an investor's perspective are these always the best offices to buy? In certain office markets is a simpler design approach more likely to pay off?

Savills 2019 What Workers Want (WWW) survey found that concentrating on the essentials and the location of a building are actually the most important features in an ‘ideal’ workplace. Over 80 per cent of respondents indicated that the comfort of their work area, cleanliness, lighting, temperature, noise level, air quality and the financial and length of commute were of high importance (see graph below).

With the race for top talent meaning that office trends are increasingly driven by employees, and given that staff are the most expensive and important part of a business, it’s essential that companies understand their workers' needs when they relocate or open a new office.

While some workers and occupiers no doubt do want all the extras, what we can take away from WWW overall is that most employees, and therefore the occupiers looking to attract and retain them, want good, clean space in an easily accessible location.

For those investors doing refurbishment projects in smaller submarkets across the UK, where average office rents may be in the mid to low £20s per sq ft, this is good news. Based on WWW, a good quality refurbishment that delivers on the basics is likely to still be in demand with occupiers. These offices should deliver healthy returns without needing to include potentially loss-leading design features in order to attract companies which, due to the rental ceilings in these locations, investors may not be able to recoup their costs on.

This is also partially due to rising construction costs across the UK which have resulted in new prime office developments (the type of which would include more elaborate design features) needing to achieve premium rents to be financially viable. While this is obtainable in major markets where top rents are £35+ per sq ft, it isn’t in many of them. 

Additionally, refurbishments can offer the scope to create an office using carbon neutral materials and renewable sources that shows a responsible environmental attitude. While it’s true that many older buildings can’t be refurbished to the same energy standards as new constructions, by retaining the existing structure a refurbishment tends to require less material and embodied carbon.

As environmental performance is such a hot topic this can be a positive selling point both with tenants and with stakeholders, who may be scrutinising an investor’s own ESG performance and strategy.

When looking to acquire an office asset buyers shouldn’t focus on appearances: a refurbished building which delivers the fundamentals of what workers want and has solid environmental credentials can be a win-win. Attracting occupiers and generating a healthy return doesn’t have to cost the earth – figuratively or literally.

Further information

Read more What Workers Want: UK 2019