Post-covid, offices and workspaces are high on the agenda in our town centres, offering the amenity, community, diverse facilities and convenience that are increasingly required to entice workers away from their home setups.
The increases in more flexible working practices, including hybrid working and hub/spoke models, spread the feasibility of these new workspaces across a broader range of locations to regional towns and smaller centres.
Affordable workspace as part of this mix recognises that a range of scales and costs helps maintain a healthy local employment ecosystem. For instance, several London boroughs now have planning policies in place that require a proportion of affordable workspace in all new office developments, much as is well-established for affordable housing. We have reported on the development of these policies previously here and here. Data is limited on the actual implementation of these policies though. Taking two authorities with the most longstanding policies, between 2015 and 2019, 2,320sqm was secured on six schemes in Hackney. Notably, in 2018/19, no floorspace was secured in Islington, with £1m of financial contributions made instead.
On the face of it, for a new build town centre, scheme affordable workspace is a sub-market product with lower capital value. Urban regeneration is already notoriously difficult to make work from a viability perspective, with complex landownerships, occupational interests, embedded values, and constrained sites. Adding a usage that does not command the highest rental values might seem counterintuitive.
We would argue, though, that affordable workspace should be a key element of town centre environments. It diversifies the centre, bringing more varied users and workers, which can expand and vary dwell times, food and beverage demand, and retail customers in general. It can also diversify ground floor uses as well as provide opportunities for upper floors. It is also a model on par with affordable housing as being of interest to funders looking for projects with higher ESG credentials.
This makes sense at the macro or centre-wide scale, providing diversity and vitality on an aggregate basis. However, this can also make economic sense on the scale of individual schemes. Making space for interesting makers, entrepreneurs and new sectors can feed into strong branding and design and help create a destination. Though affordable spaces provide less capital value on paper, done well, they can create greater scheme value overall in much the same way as independents are often encouraged over national multiples in a retail context.
Looking forward, the 15-minute city ethos means that all our urban spaces will need a combination of work, retail, leisure, living and social spaces to thrive. For the best outcomes, it is important to think early and creatively about the workspace and how it can be a positive component of urban schemes. Engaging with local authorities at the initial stages can also be beneficial to tailor space to precise emerging local employment needs. Done right, an affordable component will add commercial, social and economic value, and contribute to creating the city of tomorrow.
More on our sector-led approach to town centres here.
Listen to our podcast on affordable workspaces here.