Connectivity so vital for office market
The world's major office markets face a near-constant level of threat to their stability: macro-economic downturns, industry regulation, outsourcing and geopolitical uncertainty, to name just a few. Yet, the most clear and present danger of them all is the loss of internet connectivity arising from rising demand and failing infrastructure.
For decades, occupier requirements have centred on two fundamental drivers - location and cost . Now a third - connectivity - can be added to the list. To say that digital connectivity is as important to most businesses as mains electricity and running water is surely no exaggeration.
In a bid to attract high-growth technology occupiers a number of cities including Berlin, Lisbon, Dublin and London have invested heavily in broadband infrastructure, but has it been enough? Evidence is emerging that parts of London, for example, are facing challenges as the sheer volume of businesses concentrated in key areas is putting pressure on that infrastructure.
Shoreditch - the epicentre of London's tech/creative/digital (TCD) sector is rumoured to have connectivity issues that could ultimately undermine its status as a tech hub. This can be attributed, in part, to Shoreditch becoming a victim of its own success and also, in part, to the changing occupier landscape.
This landscape has now changed to such an extent that it has become almost meaningless to differentiate between tech occupiers and traditional occupiers. Almost all occupiers are now tech occupiers in terms of their demands on connectivity. By way of an example, of JP Morgan's 8,000 London-based staff, around 25pc are employed in technology functions.
The upshot of the relentless demand for high-quality connectivity is that landlords will have to invest heavily in getting and keeping their buildings connected. In order to attract the best tenants they will have to prove that the building's connectivity is up to scratch. Any shortcomings in this department could cost dearly, in terms of attracting tenants and, ultimately, could be reflected in the building's value.
This increased demand for buildings with future-proofed connectivity has prompted the launch of WiredScore, a new business which evaluates and certifies the quality of digital connectivity infrastructure in commercial buildings. The scheme was originally launched by former New York Mayor, Michael Bloomberg in 2013 and has since certified some of the world's most iconic buildings, including: The Empire State Building, New York; One Market Plaza, San Francisco and the Columbia Centre, Seattle.
WiredScore's 'Wired Certification' programme scores buildings on their connectivity and awards bronze, silver, gold or platinum ratings. The certifications are renewed every two years. The system aims to create a benchmark enabling landlords, agents and tenants to understand the significance of quality internet.
As WiredScore's UK business development director, Tom Redmayne, explained in a recent interview with Estates Gazette: "The certification gives agents the information they need to transparently discuss the infrastructure of buildings with clients. And for landlords and investors, it is about future-proofing.
If you are an investor and you are looking at two buildings that are exactly the same on the outside, and you know one is Wired-certified, but you had no idea about the other. If you bought the certified asset, you have the knowledge that its infrastructure provides longer-term security."
Following its success in the US, WiredScore now has its sights set on European expansion and launched a London office in 2015, followed by another in Manchester earlier this year. It has since signed up major landlords such as British Land, Canary Wharf Group, Legal & General and Tishman Speyer and certified buildings including The Shard, City Hall and Tower 42 in London, alongside Birmingham's The Colmore Building and Manchester's City Tower.
Interestingly, it is landlords that come to WiredScore first for guidance on best practice and how to ensure their buildings are the best connected in their marketplace. Once buildings have been through the certification process, they are then rated by WiredScore. These ratings are then publicly available for tenants (and their advisers) to view, ensuring they know exactly where the best connected buildings are.
So rather than a list 'naming and shaming' buildings with poor connectivity, WiredScore positions itself as more of a consultancy service to landlords, offering them a route map to better connectivity. It works alongside them on development and refurbishment projects and provides practical advice in terms of what equipment to install and how to agree services with the best internet providers.
Once a landlord has achieved a rating with WiredScore, it can then utilise this when it comes to marketing the building, allowing them to showcase the building as a cutting-edge asset.
As a city that prides itself on the strength of its tech sector, it is surely only a matter of time before Dublin is targeted for the Wired Certification scheme. This becomes even more important in the post-Brexit landscape and any occupiers seeking to relocate will want assurances that Dublin's buildings can cope with the increased connectivity demands.
In the future, we can fully expect Wired Certification to become as commonplace as Leadership in Energy and Environmental Design (LEED) and BRE Environmental Assessment Method (BREEAM) ratings. Landlords must therefore factor this in to their development, refurbishment and asset management plans to keep their buildings relevant.