The New Era of Offices Post-Pandemic
In the beautiful late spring sunshine last week, my mind was cast back to another incredibly sunny spring: that of 2020.
More than 5 years on since the start of the first lockdown in the pandemic in 2020, where are we now with the office market from an occupier perspective? In the shock of the initial lockdown, and for some considerable time afterwards, commentators and office workers alike predicted the death of the office in the medium to long term. Now, more than five years later, things haven’t actually worked out that way. Whilst a certain element of flexibility and home working is, I think, here to stay, what has transpired is that office spaces are still needed and still in demand. Even on an anecdotal basis, the younger members of teams are starting to spend more days in the office than they were even two years ago, realising that the relationship building with colleagues and the ability to learn from more experienced team members may well outweigh the expense/inconvenience of the commute.
So, the office is not dead and businesses now realise that they don’t necessarily need to downsize their office space, as was thought in 2020. On the contrary, Cushman & Wakefield comment that “Demand for London office space is in rude health with take up totalling 2.13 million sq ft over 125 deals* in Q1 2025, maintaining the upward trajectory seen in recent years.” What we are seeing though is a change in the type of space being taken up and the terms of new leases. Much has been said about the flight to quality – businesses wanting to encourage their employees to come in to the office to help build that all important team culture and skills development need to occupy quality space which is attractive, in a good location and well appointed to suit their needs. From a legal perspective, the key thing we’re seeing as well as selecting the right space is flexibility of lease terms.
Occupier tenants are increasingly demanding flexibility: flexibility in terms of alterations they can make, of use they can put the premises to and of subletting or ability to share with others.
On alterations, tenants who may be taking leases of ten years or more want to feel certain that they can make changes to their internal layouts, swiftly if necessary, to keep up with their changing needs, as the days of long banks of row upon row of desks are long gone. Occupants need space to collaborate, relax with colleagues, hold small meetings or host larger events with external guests. And these needs may change over time. Likewise, occupiers may want to increase their amenities, adding in gyms, coffee shops, canteens etc as needs or wishes change so the permitted use clause in the lease needs to be flexible to allow for that without the landlord having an absolute veto.
On sublettings, tenants may find themselves taking more space than they think they need in order to secure premium space, as outlined by C&W, and so want to sublet to third parties for short periods whilst they grow into the space. Or, the coffee shops, canteens etc mentioned above may require the ability to grant concessions or share space without granting subleases. It’s crucial that these points are negotiated into the lease at the outset so as to enable a tenant to use the space it has taken in a way that best suits its business. We’re finding that increasingly landlords are willing to incorporate these needs of occupiers, recognising that flexibility is a trend that’s here to stay!
