Covid-19 remote working could cause a resurgence in high street business as workers move out of cities and into local suburbs, a major report has revealed.
However, the research, published by the Royal Institution of Chartered Surveyors (RICS), shows a wider trend in businesses scaling back their “office footprint” over the next two years as an increasing number move to home working.
According to the second quarter (Q2) survey, some 55 per cent of chartered surveyors saw a decline in occupier demand, increasing to 86 per cent and 79 per cent across retail and office space, respectively.
Rent also “deteriorated” across the board, with 85 per cent of participants expecting rents to fall further in the coming three months – representing the poorest reading since the 2008 financial crash. This is largely driven by more than nine in 10 (93 per cent) business owners reportedly looking to scale back office requirements in the coming two years.
But instead of abandoning office space completely, business owners are likely to shift interest from urban centres to suburban locations, indicating a major boost for the high street.
Accordingly, some 64 per cent of chartered surveyors have reported increased interest in local high street property, with business owners placing a focus on “wellbeing and sustainability”.
Commenting on the report, RICS Economist Tarrant Parsons said: “The latest survey feedback unsurprisingly reflects the significant disruption and uncertainty that emerged across the economy during the lockdown period. With demand from both occupiers and investors falling sharply, respondents now anticipate rents and capital values will come under downward pressure while the market adjusts to a drastically changed economic environment.
“In particular, the recent shift into remote-working raises many questions across the office sector, with respondents expecting businesses to re-evaluate their office space requirements over the next two years. On a brighter note, the outlook is already showing signs of recovery across industrial sector, which remains set to benefit longer-term from an acceleration in the growth of ecommerce.”
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