Defurb office

How the rise of e-commerce occupiers is influencing office design

Much has been made of the rise of e-commerce and its positive impact on industrial take-up. But the growth of this sector is also driving significant demand for office space. The need to conduct trade online is causing the classification of occupier types to blur, and this will become further pronounced as more mature sectors such as finance and the public sector move towards online platforms. The Department for Work and Pensions, for example, currently has a requirement in the market for office space in Manchester city centre from which it will launch a new online platform. 

In Manchester, around 20 per cent of all office lettings last year were associated with e-commerce. Given the increasing maturity of this occupier type, a trend towards taking much higher quality space and therefore moving up the rental tone curve is emerging.

One example is online gambling brand Bet365, which acquired space in The Zenith Building, a prime property in Manchester’s financial core. Additionally, Swinton Insurance, which is increasingly conducting business online, took space in the iconic 101 Embankment at £28.50 per sq ft (£278 per sq m). 

There remains more than 100,000 sq ft (9,290 sq m) of Grade A requirements in the Manchester market from e-commerce firms, including MoneySuperMarket.com. This, in turn, is beginning to influence the design of offices. The continued rise of the ‘defurb’ is one example of this: landlords are stripping back properties to expose brickwork, pipes and original features which are popular with modern occupiers, many of which have links to online business.

Above all, building systems such as fibre optic capacity and connectivity are now vital. In our What Workers Want research last year, 54 per cent of the office workers surveyed in Manchester said they were satisfied with the quality of wireless technology in their office – one of the highest proportions in the country – but this still leaves 46 per cent who are, at best, neutral about their wireless provision. Given that e-commerce companies are likely to place even greater emphasis on this than the average occupier, if Manchester landlords want to attract these occupiers they need to make sure buildings are fitted with cutting-edge broadband infrastructure.

For landlords, striking the balance between contemporary design and the increasing needs of e-commerce and tech-related occupiers will be key. We have already seen this at XYZ and 101 Embankment, which both offer high quality design and contemporary specification. Looking ahead, this trend looks set continue and understanding the needs of e-commerce related occupiers will increasingly influence office design.

Further information

Read more: Manchester Office Market Watch

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