Morgan Sindall says the Death of the London office has been exaggerated
“The city is far from dead” its founder and chief executive, John Morgan, told the Standard, with demand for higher quality, modernised workplaces driving a “standout order book” for that part of the business, helping it lift profit guidance for the full year.
As 25-year leases come to an end, particularly around Canary Wharf, he expects growing demand for “some serious, heavy-grade fit out,” as occupants needs change after the impact of the pandemic.
“We are seeing companies thinking what is the future going to look like, what will we need going forward? We may need less space, but we need better space, we need different space … It’s accelerating existing trends, with more people working flexibly, less banks of big desks, more collaboration space.”
The FTSE 250 company reported a record set of results for the half-year to June 30, with revenue up 9% to £1.7 billion and adjusted profit before tax of £54.6 million, up 3%.
John Morgan described inflation as the company’s “biggest headwind”, with some materials costing around 23% more, while labour costs in parts of the construction industry are up 10%. To mitigate the impact, the company is ordering materials up to a year ahead.
Within the half-year numbers, Morgan’s Fit Out division lifted its operating profit by 10% to £21.2 million.
“Overall, we think there will be less square footage used for offices but the quality will be much higher, said John Morgan. “London is looking bouyant again”.