- Poor connectivity in office buildings is debilitating for businesses and acts as a deterrent to prospective clients
- A new report suggests that buildings with a recognised certification of connectivity receive higher rent than peer buildings
- Technology and media businesses gravitate towards workspaces with proven connectivity and robust infrastructure
What value do your clients place on digital connectivity?
Clients and members searching for new workspace usually rank location, affordability and connectivity among their top priorities. According to Cushman & Wakefield’s 2017 report ‘Office Leasing Trends & Outlook’, other important factors regularly thrown into the mix include proximity to public transport, client perception of the building, and natural light.
Sometimes, connectivity isn’t even stated as a priority. That’s not because it’s deemed unimportant — quite the opposite. In today’s always-on digital world, clients assume it’s part of the building fabric, like bricks and mortar.
But it’s not always the case. A low-grade or over-burdened infrastructure leads to slow Internet connectivity, which is frustrating at best. At worst, it’s debilitating for businesses and enough to send workspace clients packing. It’s not just about email or social media accounts; businesses of all sizes rely on Internet connectivity for VoIP, cloud storage, teleconferences, file uploads, project management, day-to-day communication, marketing analytics, and more.
That’s where service providers like WiredScore, a digital connectivity rating system for office buildings, step in.
In October 2017, WiredScore released the results of its study ‘The Value of Connectivity’ and found that over 80% of businesses experience regular internet connectivity problems. 77% of respondents said that these disruptions hurt their business’ profitability.
Now WiredScore has released a new study in conjunction with CoStar Portfolio Strategy that further emphasises the importance of reliable building connectivity, in a way that every real estate owner or investor will appreciate: rental value.
According to the ‘Connected Buildings Report’, buildings with Wired Certification receive higher rent than peer buildings.
The study focused on 350 office buildings in Manhattan, which all have Wired Certification.
The report summarised that across the four certification levels, “rents rose along with Wired Certification level by an average of 6.9% between each level”, ranging from Certified (the most basic) to Platinum (the highest).
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And while connectivity is one of many requirements, the report also highlights that those occupiers who are willing to pay more in workspace rent expect best-in-class infrastructure.
This is particularly relevant to businesses operating in the technology, advertising, media and information sectors, which require business grade connectivity, speed and resilience.
WiredScore’s research suggests that tenants from these sectors gravitate towards office buildings with the highest rating; 13.3% of Wired Certified Platinum (the highest rating) buildings in New York are occupied by businesses from the technology, advertising, media and information sectors, compared to only 6.9% of unrated buildings.
Of course, this is a particularly large business sector and the report doesn’t offer clear insights into tenant ratios. However, given the importance of 24/7 connectivity for businesses from the technology and media sectors, it’s easy to understand that a building that comes rubber-stamped with a connectivity guarantee would act as a standout USP for such clients.
The same goes for flexible workspace operators.
On the downside, operators may face a higher lease for certified buildings — but it also serves to attract serviced office clients or members. For instance, London-based Workspace Group secured web giant Mozilla at its Southwark offices, thanks in (large) part to its WiredScore certification.
So important is high-quality infrastructure to Workspace that Jamie Hopkins, Chief Executive, said in an interview with Property Week that they will “continue to roll out WiredScore certifications across our portfolio” at Gold standard or above.
As new generations enter the workforce and businesses become ever more reliant on time-saving automotive technologies to reduce costs and improve productivity, demand for high-grade workspace connectivity will only increase — giving those operators with proven infrastructure and recognised certifications a cutting-edge over the competition.