March 11, 2002—Six months on from the attacks of 11th September a new survey says security and cost concerns may drive firms out of central business districts.
The study, by international property adviser GVA Grimley, reveals that over two-thirds (67%) of the UK’s top 250 companies with a London headquarters—and over half (52%) with a city center HQ—are worried about the safety and security of their HQ building. Nationally, two-fifths of the companies surveyed say the terrorist attacks have made them worry about security.
Grimley also found that traditional working practices are still very much the norm in HQ buildings, with very few companies (8%) using hot desking as an integral part of their working structure. Just 20% actively encourage employees to work from home, usually for no more than one day a week.
Among the city center HQ occupiers surveyed, 71% envisage that their security concerns may cause them to reappraise their location. In London, 62% of occupiers say security concerns may lead them to consider a move, while, across the whole sample of 50 top 250 UK companies surveyed, 52% may review their choice of HQ.
The survey also confirms the negative impact that the attacks on the World Trade Center have had on the perception of tall buildings. Among the property managers questioned, 49% say they would not be happy to work in a building of more than 20 stories.
However, despite their apparent nervousness, the companies surveyed are remarkably complacent about their security arrangements. A mere 11% are actively improving security in their building, while nearly two-thirds of respondents (62%) state that they have no plans to review, let alone improve, procedures. Only 22% of companies have risk management or risk assessment systems in place, and less than half (48%) have some form of back-up or disaster recovery system at another site.
John Higginbotham, office agency partner at GVA Grimley, commented: “Although the events of September 11 have made companies think more carefully about the safety and security of their HQ buildings, many appear to be adopting a complacent approach to shoring up their security arrangements.
“There is a whole raft of potential risks to property and business, including fire, flood and power failure, which could have a serious and long lasting effect without adequate precautions and back-up.”
Security concerns may combine with a focus on reducing costs to drive businesses out of central business districts. The survey reveals cost to be the number one factor that might cause companies to relocate, with security coming a close second. Three-quarters (75%) of the property managers surveyed say they may reappraise their HQ location in response to cost pressures.
“We believe that, over the next few years, more companies will relocate at least some, if not all, their HQ functions away from central business districts to less high-profile or provincial locations. The trend for moving back-office functions to cheaper locations coincides with a scarcity of prime offices in some city centers and an increase in secondary space. Add to this, concerns over security, the need to reduce costs and a dwindling focus on prestige of address, and you have a potent recipe for change,” concluded John Higginbotham.
GVA Grimley commissioned a telephone survey of 50 of the top 250 UK companies (by market capitalization), including manufacturing and distribution, service, property and construction, and retail companies. The telephone interviews were carried out in late November 2001 by Company Resources Limited. Respondents were facilities management and property management executives responsible for making decisions relating to group properties and for handling relocation issues for group UK operations. The study aims to expose those factors that have the greatest influence on companies’ choice of HQ in the UK.
—Richard Byatt
Reprinted with permission; copyright 2002 i-FM
