In the aftermath of Covid-19, the City of London Corporation has said it expects a new normal to emerge – and that the area will need to adapt as firms embrace more flexible working practices.
When trying to imagine a visual epitome of the upheaval businesses have suffered during the Covid-19 pandemic, it’s difficult to conceive of anything clearer than the City of London, shut down and empty.
The central business district in the UK’s most populous city was as quiet as everywhere else at the height of the crisis. And now that restrictions are easing, it’s clear a ‘new normal’ is taking hold here, as in other towns, cities and suburbs around the world.
Months of remote working during periods of lockdown have thrown the benefits of the hybrid approach into sharp relief. This model – which empowers staff to split their time between home, the corporate office and a nearby flexible workspace – combines all the advantages of staying local with access to convenient, professional office environments and occasional visits to the HQ.
People enjoy improved work-life balance, firms can bolster their bottom lines by reducing expenditure on real estate and environmental goals are made more achievable by significant reductions in employees commuting. It’s no wonder that research from organisations as varied as Accenture, CIPD, the Office for National Statistics and PwC confirms hybrid working is here to stay.
Homes in the heart of the City
On this basis, perhaps it’s unsurprising that, in the wake of Covid-19, the City of London is planning to convert empty offices into housing. The City of London Corporation, which oversees the Square Mile, has said it is aiming to create at least 1,500 new homes by 2030.
It plans to use a mixture of new developments and refurbishments of old buildings to meet its target, and will aim to ensure that 35% of residences developed are affordable housing.
The number of financial services firms embracing hybrid working is of particular concern for the City, traditionally the home of the sector in the UK. Usually considered conservative and cautious, these companies are embracing change – and this is likely to mean an increase in the number of void units in the area.
To combat this, the Corporation says it will try to attract a greater variety of businesses to the area, focusing on creative and tech-led firms.
Altogether, the ‘monoculture’ of the City looks set to undergo a significant shake-up.
The ‘new normal’
The Corporation’s decision to branch out has been prompted by firms’ decisions to adopt hybrid working for the long term, according to its policy chair Catherine McGuinness. Many businesses have said they expect significant levels of flexible and remote working to continue, inspiring reconsideration of real estate needs.
Major firms including BP, Lloyds Banking Group and JP Morgan have announced plans to scale back office space. Meanwhile, enterprises including NTT and Standard Chartered bank have signed partnerships with IWG, providing employees with access to its global network of 3,500 flexible workspaces. Such deals have seen two million new users added to IWG locations around the world so far in 2021.
According to the Corporation, its intention is to “rise to the challenge of adapting to the new normal that has emerged after the pandemic.” McGuinness says: “Firms have told us they remain committed to retaining a central London hub, but how they operate will inevitably change to reflect post-pandemic trends, such as hybrid working. The Square Mile must evolve in order to provide an ecosystem that remains attractive to workers, visitors, learners and residents.”
The 15-Minute City
This provision of convenient facilities for living, work and leisure is central to the concept of the 15-Minute City – an ideal that is already informing planning policy around the world.
Originally conceived by Professor Carlos Moreno of the Sorbonne, the theory espouses that – for optimal health and happiness – people should reside in neighbourhoods where everything they need is within a 15-minute walk or cycle ride. It was a central plank of Anne Hidalgo’s mayoral campaign in Paris in 2020, and has also been adopted by politicians in locations as diverse as Seattle and Brighton.
Mark Dixon, CEO of IWG, says: “In the future, big cities are going to need to provide not only all the amenities that people need, but also a blend of accommodation so that employees can work and live in close proximity.”
In Dixon’s view, the Covid-19 pandemic has proved there is no need for lengthy, unpleasant, daily commuting. “People want to work close to where they live,” he insists. “It’s going to stick.”
Looking to the future
Alastair Moss, chair of the City of London’s Planning and Transportation Committee, explains that while the area must adapt to the post-pandemic world of work, there will always be a place for the corporate HQ in companies’ strategies. “We are expecting most office workers to return to the Square Mile for at least part of the working week,” he says.
However, Moss points out that the function of corporate offices has changed. “New ways of working have been the catalyst for a real flight to quality,” he explains. “Workers want flexible space in which to collaborate and socialise.”
Dixon agrees that, in a hub-and-spoke model of working, the company HQ must become a destination ‘hub’ for creativity and connection – a place that workers visit occasionally, with most day-to-day work done in ‘spoke’ locations such as nearby flexible workspaces. “Head office is still important in terms of corporate identity, learning and cohesion,” he confirms. “It can be a priceless cultural asset for a business.”
While change can be unnerving, the shift to hybrid working brings with it a wealth of opportunity. Ultimately, says Dixon, it is already “delivering spectacular benefits for employees and employers alike. The future of work is already with us, and it’s only going to improve.”
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