Newsletter_Q2_2018_UK

Newsletter Q2 2018

frequency of the largest Greater Copenhagen busi- nesses has been slower.

In the same survey, indoor climate, confidence in landlord and price are quoted as three key local- isation parameters. The largest businesses (50+ employees) attach particularly great importance to indoor climate, which only to some extent applies to minor companies (less than 50 employees). Conversely, price is more important to small busi- nesses than to large ones, which becomes even more pronounced when the small businesses relo- cate. Not all companies are able to land a location in central Copenhagen, where office vacancy rates are already low and where the building stock is limited. In addi- tion, today’s business tenants are demanding up-to- date and flexible office facilities, which are most commonly found outside the CBD. It therefore follows that accessibility and easy access to public trans- port become a weighty parameter for choice of office location, also in terms of recruiting young employees. Greater Copenhagen has a well-developed infrastruc- ture offering both Metro and S-train connections as well as bus services. This means that businesses find it easier to settle in non-CBD locations as their staff will still enjoy a relatively short commute. Changing business localisation criteria and moving patterns demand a lot of providers of office space. Longer term, a sustained increase in relocation activity will fuel the demand for an optimisation of existing office environments, which today appear outdated. In addition to the existing office stock, some building plots for office newbuilding still remain in the development areas of Copenhagen. These sites are expected to be developed at a steady pace, just as it is expected that the layout of new office space will increasingly take into consider- ation the mentioned shift in the preferences of busi- nesses and their wish to attract both employees and clients. Sadolin & Albæk foresees continued brisk relocation activity and an increase in the number of businesses screening the market for new office premises. Small businesses in the liberal professions are believed to continue to show the highest relocation frequency. Future demands on providers of office space

Centrally located and flexible office space highly coveted When minor businesses search the office market for new office space, they tend to value a central city location higher than major businesses do, for the sake of both staff and client base. A city setting is particularly key for many businesses in the liberal professions. Such businesses typically have natural ties to the city as it represents a natural part of their business platform. Recent years have seen as shift in the office prefer- ences of businesses. Whereas price used to be a key determinant for choice of office premises, a business today typically also values other factors, including flexible layout allowing for up- or downscaling and changing organisational structures, including more temporary staff. This trend has been a boost to serviced offices (office hotels) as they offer substan- tial flexibility both in terms of commitment periods and area adjustability. In Denmark, office hotels have gradually become recognised as a viable alternative to traditional office leases. This is supported by a 2017 survey by Sadolin & Albæk involving 600 busi- nesses. In the survey, 40% of the business respond- ents cited flexible lease conditions as an important determinant for their choice of office premises.

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