By Stefano Sciandra
Your commercial awareness dose
London, the U.K’s capital, is divided into 32 boroughs and one city, the City of London. Located at the right heart of Greater London, it was founded as a Roman settlement and then expanded during the Middle Ages. Today, not only it contains the historic centre, but it also functions as London’s main business and financial district. Many major global companies are headquartered in the Square Mile, as the City is colloquially known, so it comes as no surprise that due to Covid and Brexit, the financial district will undergo changes in the future. However, given that it survived both the Black Plague and the Great Fire, the City will surely be able to adapt and to renovate itself.
In December 2020, offices visits are down 54%, while public transport is 17% of pre-COVID levels. These figures are clearly showing that the pandemics have drained the life from the City. What has been described as the worst white-collar jobs crisis in decades, has seen companies essentially getting rid of their employees in extremely high numbers, due to clients putting a big project on hold. Accenture is set to cut 900 staff, which equals to 8% of its total UK workforce, while applications for a position in HR have risen from 25 on average to 3,000.
Due to security reasons and the implementation of social distancing, employers were asked to work from home. With the new restrictions, which will potentially last until April and with companies already considering letting their employers choosing whether to keep staying home or to return back to the office, the work from home phenomenon is here to stay. Although it won’t be covered in this article, Brexit is another possible major disruption to the Square Mile. “Brexodus” (companies leaving the UK) has been lighter than predicted, however, we have yet to see the full consequences of Brexit.
So with a health and economic crisis that is seemingly set to continue for a while, and with people advised to keep on working from home, the City is painfully emptier than usual. Bankers and other City dwellers are hoping on a return to pre-Covid life. In fact, the Square Mile is not the stereotypical cold and boring financial centre, as Frankfurt might be. It thrives on the pubs, cafes, and restaurants, all places that function as informal trading floors, where City bankers, brokers, and businessmen meet to think creatively and forge ideas that then will be executed in the offices.
The questions that analysts, realtors, and urban planners make in regards to the future of City, are essentially related to whether the offices will become operative again or not. Deloitte, a consultancy, reports that in the future office spaces will be prioritised for in-person meetings for important deals, otherwise technology is able to support more extensive use of WFH.
Lorenz Consultancy predicts that, due to the creation of environments for physical distancing, many offices have 20% more space than they require, given that a lot of employees won’t be back. That means that firms will move to smaller offices, reducing their space in terms of footprint.
Real estate planners are extremely excited about the opportunities given by cheaper offices, whose spaces can be turned into apartments, clinics, yoga centres, etc. The reality is that it is to early to predict if eventually, the City will see its offices reshaped and consequently its companies moving to different areas of the Capital.
Actually, there seems to be a bigger drive to see employers returning back to work, bringing back life to the Square Mile. The offices will probably be different and more comfortable to be in, while the City, however, scarred it may look like at first, will certainly be able to get back on its feet and attract talent from all over the world, as it does always.
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