Reading UK's Executive Director, Nigel Horton-Baker, shares his thoughts on the future of the workplace, asking whether a Hub and Spoke model would suit Reading.
Over the years that I have led the economic development and marketing of Reading, our defacto city has received many accolades, from the fluffy to the deadly serious, including the fastest growing economy in the UK (EY) and equal top ranking in the Good Growth Survey (PWC). Then along comes COVID and a new report that makes you question everything that has gone before.
Knight Frank, as reported in CoStar (5th Nov 2020), have undertaken research that ranks Reading in the top 3 future Hub-and-Spoke office locations in the post pandemic South East, based on a series of considerations: cost, staffing, commuter times, the strength of business links and travel times into central London and the local business environment, its place and vibrancy. Knight Frank make the point that everything has potentially permanently changed due to COVID-19 and that with the office worker now working from home, employers are reconsidering the cost benefit opportunity of smaller more flexible office spaces, collaborative hubs, connecting employees and clients across digital and physical space as the basis for the future.
Well that certainly makes sense. At Reading UK, we have been shouting from the roof tops that Reading’s success in attracting investment and occupiers has, for decades, been built on access to a talented workforce and location, location, location. Easy access to the capital and Heathrow and a highly skilled workforce with 50% qualified to degree level or above (40% employed in the digital sector) has underpinned a resilient knowledge-driven economy which helped us to be one of the leaders out of the last global recession in 2009.
These factors have underpinned a wave of property investment in offices and more recently residential stock in Reading. So yes we have global brand HQs, UK offices and regional offices of HQs in London, but employees would commute miles in and out of London or around the South West quadrant of the M25 from Gatwick round to the M40 to get to the Reading office, secure in the knowledge that they could be in London for a meeting in 25 minutes (soon to be an hour to the City when the Elizabeth Line is complete).
We have been worried that the arrival of the Elizabeth Line and quantum rise in residential in the town centre was going to turn us into a commuter town for London; all the benefits of lower cost housing than London, a vibrant University town with a rich arts, culture and heritage offer, great schools and a regional shopping centre but not too far out in the sticks from the real engine room that is London for commuting purposes. Why wouldn’t you?
Then COVID happened! Our most valuable asset - our people - are torn, having experienced both sides of the office/work from home cake. It’s not everyone’s cup of tea working from home, and for some it's getting a bit wearing, but have we forgotten the trauma of the 40-mile commute, congesting our road system, polluting our residential areas and children’s routes to school? Forgotten the impact on staff productivity and wellbeing, late to the office, meetings, getting home late to the family? There is a case for a new hub and spoke model and it could prosper in Reading.
Knight Frank says few occupiers have embraced this idea to date, with just 2.2% of businesses operating from more than one site. But there is already a track record of the hub and spoke model in Reading. There have been regional self-contained offices in Reading in the financial services, property and legal services for some 50 years.
Also, before COVID, we had already seen evidence of businesses viewing Reading as a base for a significant part of its staff, often sales and marketing teams, who could access London/Heathrow easily by train and had ease of access to the motorway system for visiting clients.
Companies are saving large amounts of money on office rentals in Reading or are taking advantage of the 300,000 sq. ft of co-working space in Reading town centre to limit their risk. The impressive growth of Reading town centre residential stock in recent years also makes Reading more attractive to professionals whose working lives fluctuate between London and a regional office, offering them a very convenient work/life balance.
Am I being too ambitious for Reading? Could we become a regional hub with our own spokes as well as a spoke to London, creating a digital corridor around, and into, London? Interesting also that most of the top Hub and Spoke locations in Knight Frank’s report are in the south west of London just inside and outside the M25. Maybe we should be joining forces to support the City! Developers in Reading are also talking to me about an old chestnut - the purpose-built live/work homes and flatted developments. It never really caught on, but will now, I think.
Critical to all of this is our sudden exponential learning of how to make more use of digital tech, from Zoom to TEAMS, Skype and others, our investment nationally in digital tech as the bed rock of our smart cities.
There is never a silver bullet and a mix of these options creates a great opportunity for economic recovery; work from home connected to the office, a spoke office centre within a mile or two of home connected to the HQ in London and the world through satellite comms in realtime or under an hour if you need to pop into the mini Head Office in London for high-value deal and decision making. What about some of the corporates using their big offices as meeting and conference spaces and/or incubators for their high growth and most valued clients?
But I also see this as the opportunity for regional spokes to be part of our 'build back better' approach, reducing road-based commuting and our carbon footprint, providing more jobs for local people in Reading, improving wellbeing and productivity of the workforce, providing choice and better work/life balances, putting the workforce at the helm of the recovery aided by digital tech. Ultimately, fast-forward to our Reading 2050 Vision for Reading to be a smart and sustainable city of the future.
So, thanks Knight Frank for your valuable research and thinking and showing how out of adversity comes opportunity. Any investors or developers wanting to talk more about this, do join the discussion.
I will also be including the hub and spoke thinking in our rapid response economic recovery strategy being launched this month. Reading’s economic recovery will be ‘powered by its people’, wherever they end up calling their office!