Reaching Out Post-Covid: What Event Spaces Does The Workplace Need?
Last week something amazing happened in Birmingham. Ten people, none of whom were related to one another and none of whom shared a house, met in a room in an office block on Colmore Row.
They took their masks off. They shared a long conversation and then walked 10 or 12 metres to another room, where they had some nice sandwiches and a glass or two of beer. It was remarkably normal and, as a result, completely extraordinary. Just real, live people, all a bit dazed by the experience, and all of whom had panicked about the dress code.
Fifteen months into the coronavirus pandemic, something as simple as a business roundtable event now feels giddy and exotic.
The evidence, limited though it is, suggests substantial pent-up demand for business events more or less exactly like those people were enjoying pre-pandemic.
As the UK economy unlocks and the return to work begins, many more businesses will be seeking to host events as they reach out to clients and contacts. Will the in-workplace events space be there to meet their needs?
“The energy in the room was so uplifting,” Wilmott Dixon Sales and Marketing Director Bev Williams said of the Birmingham roundtable, which came just 48 hours after government restrictions eased, making it one of the first in England. Williams is planning more events this summer, from dinners of six to lunches of 25-ish to business breakfasts ranging up to 100.
Landlords hear the message loud and clear. Schroder Property Investment Management is working on plans to beef up the event spaces at its 615K SF office and hotel complex at City Tower, Manchester. It is trialling two approaches. The first is to create flexible space that is not quite workspace, not quite event space, as part of its Elevate managed workspace offer. The main target audience is existing tenants.
“It will be about half a floor, a kind of business lounge. I think for us that is probably the direction of travel rather than out-and-out event space, which you can hire out externally, although this lounge could be let externally,” Schroders Investment Manager Phillip Scott said.
Let's Party Like It's 2019
As the Elevate concept grows and eats more floors, so the lounge/event space will grow too.
The second approach is more expansive. The City Tower complex comes with a vast underutilised basement, of which 25K SF is vacant. Pre-pandemic, this was much-sought-after space, with nightclubs, crazy golf-themed bars and gym operators jockeying for the chance to become tenants. Today, the hope is that it can be brought under the wing of the Mercure hotel, which is also part of the City Tower mix. Schroders hopes it could provide a new Manchester event space with a strong appeal to the many office occupiers in the skyscraper upstairs. “We’d like to partner someone,” Scott said.
Schroders is not alone in looking for partners, because large-scale event space poses viability problems, problems that the pandemic has exposed.
AXA Investment Managers - Real Assets ended up going down the same route as Schroders in its partnership with Convene, the U.S. meeting-and-greeting events and workspace business. Convene originally agreed to 102K SF on a lease at AXA IM’s 1.2M SF 22 Bishopsgate, London EC2. Thanks to the coronavirus, that has now morphed into 51K SF over two floors on a management agreement, and it will be entirely event space, with the workplace offer shelved.
It is perhaps instructive that Convene is pressing ahead with events space but not workspace.
AXA professed itself delighted. Head of leasing James Goldsmith said, “With fit-out due to commence in the coming weeks, we are looking forward to Convene opening and managing two floors of best-in-class auditorium and meeting room space for the residents of 22 Bishopsgate by the end of this year.
“We are currently assessing plans to bring forward a flexible workspace and coworking offering.”
You Need Partners
For Goldsmith, Convene’s event offer is not just about a chance to reach out with a plate of finger food in one hand and a glass in the other. It is an effort to create the kind of humanist space you might normally associate with a university. The event space is a lecture hall or seminar room, a place for learning and knowledge in which new thinking takes place.
“We want the different occupiers in 22 Bishopsgate to get mixed up, and this space and the other amenity space is where we do the mixing,” Goldsmith said. “The obsession is with making offices more like hotels, but instead make them more like universities, which are a kind of social network and the places where people are most productive.”
Goldsmith reckons about 5% of floorspace devoted to events is probably close to the maximum landlords will allow. However, he insisted it is not a sacrifice of lettable space: Event space can make money, and it adds to intangible benefits like ability to let.
Appreciating that animating and managing the event space is a special skill, AXA is delighted to buy into Convene’s skill set.
It says something about the confused excitement of a return to in-person workplace events that AXA, Convene and their designers, Woods Bagot, all had differing views on what the overarching point of event space was.
Whilst for AXA it was all about sharing knowledge (event space as seminar room), for Convene it was an extension of the office-as-hotel idea, more banqueting space than seminar room.
We're Just So Excited
“This will be the new amenity offer,” Convene Director of Product James Frankis said.
“Even pre-Covid, maintaining a 300-person event space was a heavy drag on your real estate business. Only a few corporations could do that for themselves. Post-Covid, I think the number of businesses doing it for themselves is even smaller,” Frankis said.
The answer is to outsource “a great event space,” which is what is happening at 22 Bishopsgate.
“Occupiers of the building can access it when they need it,” he said, envisaging large full-day and half-day events. “After all, if people are going to leave their spaces post-Covid, it needs to be somewhere worth going, so this is going to be a different level of finish with world-class event tech.”
To landlords who doubt the viability, Frankis said there is plenty of money to be made.
“Maybe the subject is that tenants take a smaller workplace footprint, but you have more amenity space like this in the building. If that’s the case, it's not about zero rent for the landlord. You can make good revenue from event space, often above the market rate. It is not writing off revenue from 5% of the floorspace,” he said.
In time Convene hopes to spread around inner London, head to outer boroughs with large corporate scenes like Croydon, and then onto Manchester and Birmingham, where organisers like Bev Williams have their eyes open for event space opportunities.
Woods Bagot London Studio chair James Taylor, up to his eyes in the design of event space, nuances its purpose as more like a town hall than a hotel banqueting suite or a university lecture hall.
“Buildings need to look outward to their cultural and social impact," he said. "In the City of London people are looking more at amenity beyond the building, and this is about embedding itself in the community. And if they embed more in the community, the building is a more valuable asset."
Landlords need to think about the civic use of their buildings: A tourist trap on the roof is one thing, a proper useful space for everyone to use is quite another. That includes event space but also found spaces like the loading bay (ideal for funky events) or the roof (how about cinema in the sky)?
“This is about intensifying the use of space,” Taylor said.
The return to workplace events in England is barely a week old. Today it is thrilling enough simply to sit opposite a human being and see skin, not pixels. But there will soon come a time when that is not enough and the quality of event space will become an issue. Landlords and developers will be ready when it does.