Timeshare Offices And A Decade Of Disruption: Allied London's Mike Ingall On The New Normal Office Market
In an ideal world, now is probably not the time that Allied London chief executive Mike Ingall would choose for the final stages of construction work on 400K SF of new speculative Manchester office floorspace.
It’s not like he was expecting 2020 to be a smooth ride. Allied London had planned for the destabilising effect of Brexit on the UK regional office market. But nobody could have predicted the coronavirus pandemic.
Today Ingall and his team are rethinking their approach to workspace, convinced that the effects of the pandemic will be long-lasting and profound.
Ingall, one of the driving forces of Manchester’s economic recovery, and one of the Sunday Times/Debretts top 500 most influential figures in the UK, dismisses those who think the office market will return to normal after an 18-24 month interlude.
“There is no normal, not now,” Ingall told Bisnow in an exclusive interview.
The 400K SF Enterprise City development, due for completion in March 2021, was planned around abnormality. “We designed the building on the basis of Brexit, so we were always conscious of risk,” Ingall said. The building has a 220K SF pre-let to Dutch-based travel business Booking.com that consolidates four existing Manchester offices.
“Today the whole process of office work has been digitised. And out of that comes things that are more than just an extension of existing trends around agility. In fact, these aren’t trends at all, they are real things that are happening and, importantly, happening to everyone at the same time. We’ve never seen that level of disruption to working practises before. We’ll probably never see anything like it again, and the truth is it’s a remarkable opportunity.”
Ingall said that the property business will have to learn a “new language” to survive in the post-pandemic world. He hints that existing leasehold structures may become obsolete.
“Everyone is going to have to be very agile, not just in way we look at real estate and how we engage with our customer, but for the foreseeable future we have to learn a new language," he said. "The fact is that trying to hold businesses to leases for properties they no longer want is a one-way street.”
In the medium-term, agile and home working trends will modify to create new spaces for office buildings, Ingall predicted.
“In the end businesses will want their workforces back in the workplace because it is very difficult to create a culture if everyone is on a flat screen at home. But the new normal will look remarkably different, and it will be different for different businesses. That new normality will take a decade to emerge,” he said.
As part of these changes there could be a move to timeshare leasing that divides the building between users by days of the week, rather than by floors.
“For instance, we’re talking to a tech business about a workplace they can use for one day a week. Which is a totally new approach to real estate. It’s a kind of work hotel, which is ideal if you want to see your people once a week for cultural reasons. And if I can get five businesses like that and build the right kind of floorspace, then suddenly you have something. What do we call it? A kind of ground-sharing.”
“We’ll see a big push to localism. Why go to London for everything, why default to London all the time? That plays to Manchester’s strengths,” he said.