Tyler Goodwin on “earning the commute”; sustainability, connectivity and authenticity
Tyler Goodwin, a Canadian developer with three decades’ experience across Asia and the UK, describes Autumn 2022 as “the worst volume in London in thirty years”. While watching the market come to a shuddering halt was unsettling, Goodwin says, “We needed that reset”.
The lull in transactions, has, in Goodwin’s views, catalysed a move to the future workplace, a change that he has both anticipated and advocated for since founding Seaforth as a niche developer in 2016.
For Goodwin, there are three distinct forces at play. One is simply that labour markets are super-tight. More than 500,000 workers, many of them from Gen X (born between 1965 and 1980), are estimated to have left the UK labour force during the pandemic. Employers must work hard to entice them back, and to woo Millennials (born between 1981 and 1996) and Gen Z (born after 1996). The workplace is more important than ever as part of the employee value proposition (EVP).
In addition to the need to attract workers of all ages, Goodwin asserts that a generational shift is underway, from Gen X to Millennials and Gen Z. Using data from the UK’s Office for National Statistics, Seaforth reckons that the Millennial and Gen Z share of the workforce has risen from 45% pre-Covid to 53% in 2022 and will increase to 68% by 2030.
These younger workers, says Goodwin, an X-er who is father to two Z-ers, care about ‘purpose’ – climate change, for example – and not just salary. He adds, “They are measuring their prospective employers on issues like sustainability, as well as diversity, equity and inclusion, and governance.”
Additionally, the pandemic has shown that many professionals can work from home. Employees are the “consumers” of the office, says Goodwin, and employers must make the office attractive with the same skill that they dedicate to marketing their products.
True, some sectors, like Real Estate have, perhaps unsurprisingly, seen a marked return to the office. Others are finding the office a tougher sell, with some employers (notably investment banks) resorting to mandates to ensure a minimum office presence. This often reflects a concern that something – whether it be productivity, learning or culture – is lost when workers are not sitting together.
According to research by Gensler, an international architecture and planning firm, employees too believe that individual and team productivity would benefit from greater office presence. Gensler’s 2023 UK Workplace Survey found that while time spent at company workspace had fallen from 83% on average across the UK to just 46% in 2023, the ideal office presence was estimated by employees to be 66% (i.e., almost one half higher than the current rate).
Persuading scarce talent to come into the office is not just a matter of dry Energy Performance Certificate ratings, important as they are, but also the building’s amenities and the surrounding vibe. Perhaps surprisingly, Gensler says that “if the right mix of experiences [is] offered, the younger generation of workers are the most willing to come into the office more”.
Goodwin points to varying tastes by age cohort. Gensler’s US Workplace Survey 2022 cites Gen Z and Millennials as prioritising coffee shops and a “boutique hotel” experience. While Gen X and Boomers also like their caffeine fix, they rank the corporate environment much more highly than their younger colleagues. Gensler found that “78% of hybrid workers would be willing to come into the office more often for the right experiences”.
Goodwin also advocates for the alchemy of location. He points to Coal Drops Yard, the refurbished industrial site at King’s Cross, as a location with “authenticity”. American Vintage, a clothing store, is an anchor tenant, among other independent retail outlets heralded by the developer.
He is a fan of the connectivity offered by London’s new Elizabeth Line ( formerly Crossrail). Seaforth’s four most recent developments are close to stations on the new line: Tottenham Court Road, Farringdon and Liverpool Street.
Seaforth’s refurbishment of a mid-century brutalist building formerly occupied by the Civil Aviation Authority to create contemporary loft offices, with the best achieving an “Outstanding” BREEAM energy efficiency rating, reflects the importance of this new connectivity. Space House is in the part of town Deloitte calls ‘Mid-Town’, which has been a bit of a no-man’s land between the West End and City proper. With the advent of the new Tottenham Court Road Crossrail station, however, Goodwin says that the neighbourhood, which he calls “Covent Garden East”, has seen “a resurgence in demand”.
Connectivity doesn’t necessarily trump other factors, according to Goodwin. He is not a fan of Docklands, for example, though it also benefits from a new Elizabeth Line station. He feels that “it lacks authenticity and the lifestyle elements that young talent are looking for,” and adds, “As employers vie to attract and retain talent and then earn their commute into the office, it’s just not going to happen with a glass box or cubicle farm”.
While Goodwin foresaw and is catering to a “quality over quantity” pivot, accelerated by hybrid working, which reduces the demand for space, he sees a strong countervailing force.
London offices have steadily become more dense over the past three decades. With office space now a key part of the EVP, Goodwin feels that we have reached “peak density”.
Goodwin also makes a point that is often overlooked: office attendance is often bunched around mid-week. He says, “Businesses that thought hot-desking would work are now experiencing low occupancy on Mondays and Fridays and 120% occupancy in mid-week, discouraging people from coming into the office when they want to.”
“With employee costs often around ten times the cost of office space, and as the war for talent becomes more costly, expect employers to give back some of the cost savings generated by high density to deliver the office experience that today’s talent desires”, he predicts.
Despite the big challenges at present for the London development market, Goodwin continues to believe that opportunities abound. But rather than just riding the cycle, or benefiting from ‘beta’ – the jargon for correlation with market trends – the winners of the future will be those who seek ‘alpha’ – the idiosyncratic building, perhaps an unloved modernist or brutalist edifice, that can be given fresh life.
Our Deloitte London Office Crane Survey Summer 2023 launched on Monday 22 May, to dive into the data, please visit: https://deloi.tt/3WPabbT
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Tyler established Seaforth Land in 2015 with the mission to build London’s best office development company around highly profitable, sustainable, design-led and experiential offices in London’s path-of-growth submarkets.
Tyler is a well known disruptor with a passion for research, architecture and interior design. He has over 30 years of international real estate experience across Asia, North America and the UK in property development, investment banking, principal investment, and investment management. He was ranked #35 in the “Estates Gazette 2014 Power List 50” as one of the 50 most influential people in the UK property industry.
