Hybrid working: reshaping local high streets

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Working from home still divides opinion. Some companies are clamping down. Still, average office occupancy rates in the UK were about 30 per cent in the first half of the year, according to Remit Consulting. Before the pandemic, this was more like 60 to 80 per cent.

Central London property investors are being forced to adapt. But there are beneficiaries: high streets outside the central London district known as zone one.

Retail vacancy rates have improved compared with 2019 in locations such as East Ham and Dalston in east London, Kilburn in the north and Chiswick in the west, according to property group Savills. Food and drink retailers especially want to expand out of town to reach more homeworkers, according to Marie Hickey, Savills’ director for commercial research.

An index produced by sandwich chain Pret A Manger shows something similar. Transactions at its suburban London outlets were 21 per cent higher in the week ending June 15 than before the pandemic. Transactions at its City of London stores were still below pre-pandemic levels, although improving.

Working from home has not lifted every location. Affluent areas with high footfall and large populations within a mile of retail areas are the most sought-after, Savills says. Vacancy rates in London suburbs such as New Cross and Hounslow are still trailing 2019 levels.

Across the UK, retail vacancy rates remained stagnant at 13.8 per cent in the first quarter of the year on the previous three months, according to the British Retail Consortium. This reflects retailers’ caution as inflation remains high. There was, though, a year-on-year improvement of 0.3 percentage points.

Whether employers favour it or not, working from home continues to have an impact on property markets.