EMPLOYMENT DENSITY

GUIDE
3rd edition

November 2015
Homes & Communities Agency Contents

Contents
1. Introduction ................................................................................................................. 1
2. Calculating employment densities............................................................................... 3
3. Influences on employment density .............................................................................. 9
4. Employment density matrix ....................................................................................... 29
5. Further considerations & guidance ........................................................................... 30
6. Comparison of densities 2015 to 2010 ...................................................................... 36

If you have any questions on the Guide, please contact: Simon Dancer, Economist at
[email protected]

November 2015

For and on behalf of GVA Grimley Ltd

Disclaimer:
This Guide has been prepared with the utmost care and due diligence by Bilfinger GVA
and the Homes and Communities Agency in partnership with a range of industry experts.
It provides a strategic view of general employment and economic trends and their
influence on employment density. It is intended to provide a general guide to
employment density and a robust and consistent base for the HCA and its partners to
assess the potential local employment benefits of impacts of changes to the size and use
of commercial floorspace in an area.
The Guide is not intended to replace detailed development-specific information or
analysis but provide a consistent benchmark to assess local employment density
changes. Its contents should not be relied upon for property, investment or financing
valuation or economic appraisals requiring central government approval. The authors
accept no liability for the use of the Guide beyond its stated aims and objectives.

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1. Introduction

1.1 This report provides the latest version of the Employment Density Guide (“the Guide”).
The previous version of the Guide was published in 2010 and represented the second
edition following publication of the original research report in 2001. In the 14 years
since the first Guide was published, it has become the ‘go to’ resource for a range of
property, planning, regeneration and economic development professionals
underpinning a range of impact assessments and appraisals, policy development and
strategy production.

1.2 Whilst the Density Guide is an important tool in the decision making process there are
a range of guides that should be used for specific appraisal purposes. For example,
for economic appraisals, the primary source of guidance is HM Treasury’s Green
Book, which sets out the appraisal techniques required for an economic appraisal
requiring central government approval.

1.3 The Guide’s ever increasing role at the centre of a range of property related activities
requires that its density metrics remain as up to date as possible, reflecting the latest
industry ‘norms’ of how space is planned, developed and utilised to ensure it provides
a robust and reliable basis for its ongoing use.

1.4 It is against this backdrop of increasing prominence and utilisation that an update to
the existing Guide has been prepared. Much has changed since the production of the
2010 Edition, which drew on data and information from earlier years. These changes
have had profound effects on not just the shape of the economy but also the way
businesses operate and use their premises and the very types of property that now
support economic activity.

1.5 The core focus of this update has been the identification of the factors influencing the
use of employment generating property within the UK and understanding what impact
this has on how floorspace supports employment in order to ensure that the Guide
remains accurate and relevant in the densities it provides. At the core of the
commission is the task of testing the 2010 density matrix against current usage trends
and making appropriate modifications to the matrix where necessary.

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1.6 In order to provide a robust update to the Guide, a number of research approaches
have been utilised to understand how use of employment generating floorspace has
changed. At the Scoping Stage an extensive literature and research review was
completed, drawing on both academic and industry information to set the context.

1.7 Consultation was then undertaken to test the findings of the literature review and
support the development of the employment density matrix. These consultation
‘interviews’ were held with a range of property advisors, including planners, property
agents, investment advisors and property managers in order to gain a rounded view
of industry specific behaviour (See Appendix I).

1.8 Finally, draft findings were tested with property occupiers, operators and
representative bodies in order to ensure the final matrix aligned with the most up to
date trends in property utilisation. This exercise was primarily focused on testing
assumptions within the Guide that were subject to the greatest change.

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2. Calculating employment densities

2.1 This section provides details on the method and issues that must be considered when
calculating densities.

Employment densities

2.2 Employment density refers to the average floorspace (in m²) per full-time equivalent
(FTE) member of staff. It is used as a measure of intensity of building use and an
indicator of how much space each person occupies within the workplace.

2.3 Calculating the jobs generated by a particular use or building using employment
densities relies upon a consistent understanding of floorspace. We provide a simple,
introductory guide to floorspace measurement and employment below.

2.4 More detailed analysis and guidance is provided on calculating floorspace is provided
in the RICS Code of Measuring Practice (6th Edition) which was updated in May 2015
to reflect and incorporate the new International Property Measuring Standards, which
currently only apply to offices.

Average employment density figures

2.5 Historically average employment densities have been derived from surveys of a large
number of buildings; this has provided the baseline understanding of the relationship
between floorspace and jobs. Since 2001, a number of industry bodies have
continued to survey specific sectors and we draw on this research to inform the
Guide, as considered in Section 3 in more detail.

2.6 With a robust understanding of employment density, it is also important to ensure the
floorspace estimates are as accurate as possible.

Measuring floorspace

2.7 The Royal Institution of Chartered Surveyors (RICS) recognises 3 principal

measurements of floorspace: gross external, gross internal and net internal. In
summary these are:

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 Gross External Area (GEA) – this measurement includes walls, plant rooms and
outbuildings, but excludes external space such as balconies and terraces. It has a
narrow field of use mostly limited to calculating building costs for large industrial
and warehouse buildings, planning applications and approvals, council tax
banding, and rating in Scotland for industrial buildings

 Gross Internal Area (GIA) – this refers to the entire area inside the external walls
of a building and includes corridors, lifts, plant rooms, service accommodation
(e.g. toilets). It is a widely used metric used in calculating building costs,
marketing, valuation, property management and rating (in England and Wales) of
industrial buildings (including ancillary offices), warehouses and leisure units and
also the valuation of new residential developments

 Net Internal Area (NIA) – this is commonly referred to as the net lettable or ‘usable’
area of offices and retail units. It includes entrance halls, kitchens and cleaners’
cupboards, but excludes corridors, internal walls, stairwells, lifts, WCs and other
communal areas. It is a widely used metric and is the recognised method for
marketing, valuation, property management and rating for offices, shops and
supermarkets.

Floorspace metrics

2.8 In Section 4, the Table of Employment Densities gives the measurement basis for
each use class. It is recommended that the relevant floorspace metrics are used
consistently throughout a project’s development, appraisal and evaluation.

2.9 It is important to understand the basis of floorspace measurement and to use it

consistently. If necessary, a given figure on one basis can be converted to the
appropriate basis for the employment density type.

Converting gross internal to net internal area

2.10 Gross internal to net internal ratios can vary significantly according to use:

 For office space the gross figure is typically 15-20% higher than net internal space.
However, this will be dependent upon building design and configuration, in
particular relating to heights, number of cores and building servicing

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 for all multi-tenanted buildings the range may be higher than 15-20% given the
space allocated for shared or common areas. More often job estimates will be
based on the ‘let-able’ area which exclude common parts such as meeting spaces

 for larger warehouses, the net area can be as much as 95% of the gross area

 for retail units the net to gross internal area relationship can be in the region of
90%

2.11 As a general benchmark, 15-20% acts as a suitable assumption for converting gross
to net areas in non-industrial properties.

2.12 It is worth noting that figures for notional or proposed schemes may be presented as a
GEA measurement. To convert these to a GIA, the general benchmark is a reduction
of 5%.

Table 1 - Worked Example, Converting GIA to NIA

Approach
Example Development 1,000sqm GIA development of B1a office used by the Finance & Insurance
sector
Appraisal NIA is calculated using the benchmark in Paragraph 2.10 above:

1,000 x (100-15)% = 850sqm NIA

Or

1,000 x (100-20)% = 800sqm NIA

2.13 The figure used will be dependent on the level of space efficiency anticipated at the
building. For more efficient buildings, use a lower conversion percentage of 15%.

Vacant space

2.14 When evaluating actual densities, only the occupied floorspace should be used
in the evaluation. Appraisers should include a note on the amount of unoccupied
space in the building at the time of calculation so that the basis of the calculations are
clear. This mitigates the risk of the vacant area distorting the employment density
figure.

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Table 2 - Worked Example, Calculating Vacant Space

Approach
Example Development 1,000sqm GIA development of B1a Finance & Insurance Sector office space as
per Table 1, resulting in 800sqm NIA
Appraisal Apply benchmark of 12sqm per FTE as per guidance in Section 4 to NIA
floorspace.

800 ÷ 10 = 80 FTE
Evaluation Despite a floor area of 800sqm only 700sqm is occupied, therefore employment
is calculated as:

700 ÷ 10 = 70 FTE
Note: The building has remaining vacant floorspace of : 800 – 700 = 100sqm
Equating to potential additional capacity of: 100 ÷ 10 = 10 FTE

2.15 The FTE and employment density figures in Section 4 are based on 100% occupation
of a building.

2.16 Vacancy rates in buildings can vary significantly. There is no ‘rule of thumb’ to
allocate a vacancy rate for any specific reason such as use type, scale, timing or
location. It is recommended that in carrying out a project appraisal, sensitivity analysis
is used to generate a number of vacancy rate scenarios (e.g. 50%, 70%, 90%) for,
say, 12 months after first occupation of the building to assess the impact on the
forecast gross jobs figure.

2.17 This sensitivity analysis would also enable an allowance to be made for any ‘void’
periods, i.e. periods when a property is unoccupied and unable to be re-let. These
often occur at lease expiry where a property requires refurbishment prior to a new
tenant taking up occupancy. Void periods will be directly influenced by the age and
condition of the property and the strength of the local market. Estimates should be
based (where possible) on these localised trends.

Measuring employment

2.18 Employment can be measured in several ways:

 Actual – the number of employees who are full-time, part-time, or on contract

 Full-time equivalent (FTE) – the number of total hours worked as a proportion of

the average annual hours worked in a like-for-like full-time job

o 1 FTE means the person works full-time

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o 0.5 FTE means the person works half-time. Thus 2 part-time staff who work
half-time each will equal 1 FTE

2.19 In evaluating completed projects it is recommended that FTE numbers are used to
measure employment achieved. These figures should be compared with the
employment forecast made as part of the project appraisal. Where there is a
significant variance (i.e. +/- 10%) between ex ante appraisal and ex post evaluation,
an explanation for the difference should be provided in the evaluation.

Trends in full and part - time working

2.20 The ONS Annual Survey of Hours and Earnings (ASHE), provides data on the
proportion of employees working full or part-time in different occupations:

 Service industries: part-time employment ranges between a low of 40% (found in

the financial services sector) and a high of 63% (found in the leisure and
recreation sector – reflecting shift patterns in bars, pubs and restaurants and
seasonal working)

 Manufacturing: less than 10% are part-time

2.21 With regard to the proportion of hours worked by part-time staff to FTE, the majority of
part-time staff work between 45% - 55% of full-time hours, with an overall average of
50% for all services and industry.

2.22 A ratio of 2:1 part-time staff to FTE should therefore be applied.

Calculating employment densities for redevelopment projects

2.23 Predicting employment density figures during the project appraisal stage is most
accurate for new build (or recently constructed) properties and less accurate for older
properties. This is because new buildings are usually designed with regular shaped
floors and capable of servicing the employment densities set out in Section 3. See
also Section 4 for guidance on density variances in older buildings.

2.24 When an occupied building is to be redeveloped, care needs to be taken in the

application of employment density metrics when calculating the additional new jobs
created by the project (i.e. the gross number of jobs accommodated in the
redeveloped building less the previous number of jobs in the original building). If firm

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data sets are not available on employment in the original building and employment
density ratios are used to determine employment levels, appraisers should adjust for
the type and age of the building(s) concerned and the businesses within them.

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3. Influences on employment density

3.1 As noted within the introduction, there have been significant changes within the
property industry and economy more generally that have had a direct influence on
how commercial property is planned and utilised since the publication of the previous
Guide in 2010.

3.2 However, these changes have resulted in more than just a shift in occupier and
operational density. Rather than focusing on the buildings themselves, employment
density is increasingly more closely aligned to the nature of the business or sector
which they accommodate. This means that an understanding of the occupier is
equally as important as knowing the planning use class. It should be recognised that
this can be challenging without an identified ‘pre-let’ occupier.

3.3 As such, it is clear that changes to the economic context have driven a fundamental
shift in how many types of property can be categorised and therefore considered in
employment density terms.

3.4 Within this section we provide an overview of the key drivers of change and the broad
nature of their influence across property, full details of which are contained within
Appendix 1 to this report. This section also provides definitions of the new property
classifications used within the density matrix to ensure users can apply the new
approach to employment densities effectively.

Key influences on employment density

3.5 Based on an initial scoping exercise to identify the key factors influencing employment
density, the research has sought to consider the implications of:

 advances in technology

 the evolution of new forms of workspace

 changing trading formats

 sector and sub-sector activity

3.6 This list is clearly not exhaustive but these factors appear to have the strongest
influence on the design and utilisation of employment space. They reflect

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fundamental changes in the way businesses can and do operate and therefore have
different influences on different types of businesses or economic sectors. Their
influence is not only changing employment density per se, but also more closely
aligning levels of employment with the nature of business activity as much as the
‘category’ of property they occupy. This is explored in more detail below.

3.7 Our engagement and consultation with industry representatives, operators and
occupiers confirmed these were the key factors they had experienced that were
changing the way property was utilised and the level of employment a given quantum
of floorspace would support.

3.8 The influence and effect of these factors on the full range of property types contained
within the 2010 Guide were considered. Impacts were considered in terms of broad
effects and classified as having no discernable influence, an upward influence (i.e.
they enable people to use space more densely) or a downward influence (i.e. they
result in a ‘less dense’ use).

3.9 The assessment of broad effects has principally been informed by a mixture of
desktop research, which has considered sector-specific and use class-specific
information on development delivery and interviews with senior property advisors who
are engaged in advising property developers across the full range of property use
classes.

3.10 The majority of the influencing factors served to have some impact on employment
densities and, therefore, necessitate an update to the employment densities within the
matrix. However, as set out below, the effects from any single factor are not uniform
across all property types or even within a single use; as such some level of judgement
has had to be applied in determining the final Density Matrix.

Advances in Technology

3.11 The advances in technology made in recent years are having a broad range of
impacts on the way employment floorspace is used and, therefore, the level of jobs it
supports. However, the impacts of technology on employment density are not linear
and have contributed to a complex set of relationships that on the one hand serve to
reduce density by making existing processes more efficient. On the other they create

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new servicing and employment requirements, placing upward pressure on

employment density.

3.12 These upward and downward pressures are felt across a range of activities in
different ways. From ‘high street’ activities (such as banking and retailing) through to
large scale distribution the effects of new technology are influencing how much
employment an activity supports.

High street
3.13 Technology is having a major impact on the ‘retail’ sector in terms of how goods and
services are sold to customers and how these are then supplied. Clearly the impact
of internet retailing is a major factor and we consider this later in this section.

3.14 Technology is also improving the manner in which transactions are completed,
increasing the usage of new point of service (POS) technology such as ‘self-scan’
checkouts and also introducing online terminals in stores for customers to ‘self-order’
products that the stores do not carry.

3.15 Both of these trends impact the level of employment within a store, however they do
so in different ways. Increased use of POS reduces the number of cashiers required
to deliver sales levels however the relatively new experience has required a number
of staff to fill ‘customer service’ roles, helping customers familiarise themselves with
the technology. This has protected some employment however still resulted in a
lower density overall.

3.16 Increasing use of online ordering within stores has been a major factor for many
larger department and other comparison goods stores. This has not appeared to
have a significant impact on employment levels, with the focus still retained on
customer service, as such employment densities has remained static.

3.17 Outside of the retail environment technology has also impacted on the nature of
activity undertaken within high street banks and building societies. Branches now
provide a much higher level of self-service machines allowing basic banking tasks to
be undertaken without the need for a cashier.

3.18 However, similar to the retail sector, high street banks have increased the presence
of ‘customer service’ staff who provide much more of a host role, helping customers

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themselves or providing support in using self-service machines. Clearly, the nature of

high street banking and the range of financial and mortgage advice provided limits the
scope for decreasing employment levels substantially as specialist employees are still
required.

Office
3.19 Generally technology is having an upward influence on employment density within
office properties through the increased flexibility it provides for space planning/usage
and the decreasing space requirements of physical infrastructure.

3.20 For example, the shift towards flexible working is driven by enhancements to wireless
connectivity, which is now much more reliable and able to provide much higher
bandwidths. This allows more agile working, lessening the need for many workers to
have a ‘fixed desk’ and therefore reducing under-utilisation of space.

3.21 More agile forms of working have also been supported by (and driven) innovations in
hardware and office fit outs. The increasing use of laptops and the advent of flat
screen monitors have allowed actual desks sizes to be reduced by as much as 10%
meaning it is possible to fit a greater number of desks within a fixed area. Taken with
greater utilisation of these desks employment density enhancements could be
significant.

3.22 Similarly increased usage of ‘Cloud’ computing and the growth in datacentre provision
(supported by improvements to the UK’s fibre infrastructure) has resulted in less office
space being turned over to large server rooms. This reduces the level of non-active
spaces within an office, again enhancing the potential employment generated by a
particular building.

3.23 This has decreased the relative proportion of a business’s cost base which is
dedicated to property costs, providing an even greater focus on labour costs as a
much more significant cost component. This has also begun to change the way
offices are designed with greater flexibility and agility allowing new work areas such
as breakout and collaboration spaces to be delivered. This creates a more diverse
and interesting environment for workers and reduces the employment density of the
office to some degree.

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3.24 Ultimately, through greater electronic storage of information, more flexible working
(including hot-desking and increased working from home) and the adoption of open
plan space rather than cellular offices businesses are able to make better use of the
space they occupy.

3.25 However, these trends are not universal, with their impact limited by sectoral activity,
floorspace supply and job role. The nature of some activities where there is a high
reliance on personal interaction, a need to use specialist equipment or provide call
centre services will prevent the introduction of increased flexible working. As such,
the influence of technology and changing working practices is likely to be more keenly
felt in office-based sectors.

3.26 There may be some limitations to increased utilisation in some professional service
activities (such as legal and accounting practices) which are unlikely to be able to
achieve high space efficiencies through higher occupational density as they need to
accommodate greater provision of cellular offices and meeting spaces. However,
these would enable some degree of flexible, remote working, raising potential
efficiency levels.

3.27 Through our research and in consultation with key industry bodies such as the BCO
the differing impacts across sectors have been confirmed and have directly influenced
both the revised structure of the Guide, which for the first time suggests different
densities based on occupier activity.

Automation and Production

3.28 Increased automation has had a particularly significant effect on the manufacturing
and distribution sector. It is most marked within the UK’s automotive sector where
much more significant elements of production are automated, reducing the need for
production line staffing.

3.29 The impact of automation within the distribution sector is not uniform. Whilst widely
used in the clothing sector, others are yet to fully embrace new technology, albeit
some systems are being developed by industry leaders which are likely, in time, to be
adopted by others. Much of the drive towards greater automation is to increase the
speed and efficiency of multi-product order picking, which at present is largely

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undertaken manually. However, as racking techniques and stock management

software advance there may be reductions in the employment requirement.

3.30 These factors have had a downward pressure on employment density within units;
however there are other factors which are offsetting this trend. With greater
automation comes a greater level of servicing and support of the machinery. This has
seen an increase in skilled employment within these sectors, particularly for
maintenance engineers and computer programmers.

3.31 Furthermore, ongoing requirements to improve operating efficiencies are introducing

new activities into manufacturing plants and distribution centres in particular. Costs of
shipping and reducing margins are driving operators to do more ‘final assembly’ within
units rather than store completed products, which often occupy more space. This
reduces the amount of ‘pure’ warehousing space and increases employment density.

3.32 Similarly, facilities are integrating greater levels of office floorspace to enable
complete business operations to be accommodated under one roof, reducing property
costs. These increase levels of employment within units and hence serve to increase
overall employment density.

The evolution of new forms of workspace

3.33 There has been a significant shift in business practices in the last 2 decades. The
growth in information and digital technology has transformed the way companies
organise and communicate. This has also made office functions more complicated.

3.34 The economic shift towards knowledge intensive sectors has brought a shift in work
practices and the way businesses communicate. Workforce productivity in the UK has
stalled since the recession, with some estimates placing it at c.16% below pre-
recession levels (Source: Bank of England Quarterly Bulletin, Q2 2014). Given the
UK has continued to see employment growth at its highest in the ‘knowledge
economy’ (i.e. professional services, technology and digital/media firms) there is no
clear, singular explanation of this apparent ‘puzzle’ within the UK economy.
Economists believe a number of factors are contributing to this weaker than
anticipated performance, including: potential mis-management of resources; latent
capacity within existing businesses; reduced capital investment driven by tightening

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lending and even potentially ‘artificially high’ productivity in key sectors such as
finance in the pre-recession era.

3.35 Despite these potentially structural challenges in the UK economy as a whole the
growth in knowledge based economic activity has seen firms demand and require
new functions from their office space compared to more traditional firms. Digital media
firms often need multi-functional spaces in which dedicated desks can combine with
collaborative areas to create a communal space to increase creativity. Emerging
companies require more flexibility in terms of both office space and rental lease.

3.36 Home working in the UK has seen a significant rise over recent years. Data produced
by the ONS in June 20141 suggests that almost 14% of the UK’s working population
now work from home, the highest rate since comparable data collection began in
1998, growing at an average rate of 1.2% per annum. The analysis suggests
homeworkers tended to be higher skilled, with approximately two thirds self-
employed.

3.37 Although all regions in England have seen growth in the proportion of people working
from home this has been strongest in the South East and North West of England and
London, where there has been a percentage point increase of c.2% since 2008. The
proportion of the population working from home is highest in the South East and
South West, with 16% and 17% of the working population respectively working from
home.

3.38 This increase has been driven by a range of factors including growth in self-
employment, improved broadband connectivity, property prices, commuting distances
and efficiency and cost savings. This increase has been present in previously office
reliant sectors i.e. consultancy and accountancy. Businesses are adapting to the
varying lifestyles of modern employees. Increased flexibility allows for a balance
between work, family and other commitments.

3.39 There has also been an increasing preference towards the major urban centres with
more businesses preferring to re-locate closer to the urban core services. This

1 http://www.ons.gov.uk/ons/rel/lmac/characteristics-of-home-workers/2014/rpt-home-workers.html

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process has in part been driven by market and lifestyle choices with workers wanting
to be in close proximity to urban amenities.

3.40 Affordability is also one of the determining factors for the shift away from more
traditional workspace models. With the increasing rental values in the urban core and
increasing demand for residential property, affordability is the key factor for many
micro and small businesses. New forms of workspace provide a more sharing based
option which helps businesses with offsetting some of their operational costs.

Changing trading formats

3.41 When the 2010 update of the employment densities guide was undertaken, the retail
sector was experiencing considerable challenges as a consequence of the rapid
deterioration in the national economy into a prolonged period of economic recession.
Much has changed during and since this period of economic instability and recession,
with significant implications for retail and town centre growth, which in turn can have
influence on the use of floorspace and density levels observed within the sector.

3.42 Our engagement with the retail sector suggests that, broadly, the trend identified
within the 2010 Guide that employment aligns more closely with a retail unit’s turnover
rather than its typology remains true. However, a diversification in the way retail is
serviced and the way in which it interacts with its customers suggest that the nature of
activity within the retail unit is also critical.

3.43 The most significant impact and influence lies within the growth of internet retailing,
which has increased significantly over the past decade as a share of overall consumer
spending. However, recent data suggests that internet shopping has begun to
plateau and the days of rapid growth may be over which, in turn, suggests that current
practices are likely to be the new normal for the foreseeable future.

3.44 The rise in internet shopping has brought new occupiers to the high street. Some
retailers were initially ‘internet only’ but have now sought a shop front on the high
street. These tend to be very selective in their locations, focusing on retail centres
with high levels of footfall in order to maximise exposure.

3.45 Such stores seek to provide a customer ‘experience’ allowing them to interact with
products or whole brands prior to purchase. This activity has a significant focus on
customer service and hence tends to provide a high level of employment compared to

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the unit size. However, this is partly offset by the range of goods displayed within the
unit, which require larger floorplate units without necessarily requiring increased
staffing.

3.46 Technology and internet shopping has also changed the nature of activity within
stores. The ‘Click and Collect’ market is the largest on-line growth sector in the UK at
the current time and is now recognised as providing a reason for retailers to retain a
network of stores to service local markets.

3.47 This has 2 opposing influences on employment density within retail units. The
provision of click and collect services requires a greater level of customer service
provision to enable goods to be collected in an efficient manner by the consumer.
Within stores employees are required to staff specific collection points, with further
needs for staff within storerooms to sort deliveries and retrieve them for customers.
As such, there is a potential uplift in staffing as the storerooms become more active
and staff cannot cover the whole ‘shop floor’.

3.48 Further employment demand has resulted from other specialist click and collect
package ‘holding’ services that occur outside of major retail stores. A range of small
and medium sized retailers (including independent convenience stores and firms such
as Argos) now offer collection services. These may result in a need for additional
staffing to manage deliveries and also serve customers. A further recent trend is the
growth in specific collection ‘kiosks’ in range of locations (such as Doddle who locate
within or close to transport hubs). These new entrants to the ‘high street’ again require
staffing.

3.49 Depending on the nature of the click and collect goods, a greater level of storage
space may be required within retail units, shifting the focus away from active ‘trading
space’. This may decrease overall density if the relationship is considered solely as
one of active floorspace to employment. However, given click and collect have a
positive impact on turnover and trading levels this is likely to be offset by increased
needs to ‘service’ customers.

3.50 The other major sector that has been heavily influenced by changing customer needs
is foodstores. Recent trends show a shift towards more repetitive top-up shopping
rather than single large bulk shopping trips. These have been driven by (and also

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influenced) the shift in focus from convenience retailers away from the development of
new large superstores towards smaller metro style provision.

3.51 This shift is only possible thanks to improvements in the stores supply and logistics
chain, which allows efficient stock delivery and management and, in turn, reduces the
level of stock held on site. This allows convenience retailers to reduce storage
requirements and therefore the size of unit they occupy whilst still providing a full retail
offer. This also requires greater stock replenishment activity, with dedicated staff
required to deal with more regular deliveries and ensure these are quickly on the shelf
for sale. This is critical in stores which provide greater levels of fresh produce or pre-
made meals and snacks.

3.52 As a result of this shift employment densities within smaller, high street convenience
stores have been slightly enhanced, albeit with no actual increase in staff numbers.
However, what has happened is that these improved efficiencies have offset any
potential reductions from other technology advances such as self-scan.

Sector and sub-sector activity

3.53 The nature of activity across all parts of the economy has changed significantly in
recent years, with new sectors emerging and existing sectors diversifying or radically
changing the way in which they operate. These changes have a significant impact on
how space is used and needs to be understood in order to estimate the employment
density of particular property types.

Office
3.54 The 2010 Guide split the office sector into General Office use (B1a), Call Centres use
(B1a), IT / Data Centres use (B1a), Business Park use (B1a) and Serviced Office use
(B1a).

3.55 However, our analysis of more recent research into office trends suggests that the
current categorisation of floorspace in the office sector based on ‘typologies’ does not
capture the nuances of the way floorspace is used by different office sub-sector
occupiers. They do not acknowledge the different types and scales of uses
undertaken by the varied occupiers within them. This was tested further through
consultation with key stakeholders, who confirmed a much closer relationship existing
between employment and activity rather than the location or type of property.

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3.56 Employment density is much more closely aligned to the type of activity
undertaken within the property rather than its location or building type. Our
understanding of occupier density (informed by the BCO Occupier Density Study
(2013)) suggest that there are five sub-sectors which have identifiable occupancy
trends:

 Corporate

 professional services

 public sector

 technology, media and telecoms (TMT)

 financial and insurance.

3.57 It should be noted that many of these sub-sectors fall into more than one office
typology, which suggests a more nuanced approach towards understanding office
employment density.

3.58 Engagement with both the BCO and BPF has confirmed the differences in density are
now more closely aligned to the occupier activity rather than building typology.

B1b uses and the R&D sector

3.59 Within the 2010 Guide B1b uses are not included. In the practical application of the
Guide research and development of products and processes have tended to fit within
the industrial category of uses. However, more detailed analysis of trends in the
sector suggests they do not fit neatly within the current B2 and B1c classification.

3.60 The R & D sector is a dynamic and broad sector, which reflects the significant
technological and scientific advances which are shaping the evolution of the industrial
sector. The sector can be considered to be split into two key directions; an innovation
and science focussed direction which is associated with the knowledge economy and
life sciences activity, and a more traditional industrial focussed direction which fits
alongside manufacturing.

3.61 The more traditional industrial focussed R&D sector, which sits alongside
manufacturing uses, bears similarity with the Light Industry (Business Park) use types
within the current density guide, however further analysis into the alignment of

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floorspace use will identify the level of alignment with the 47sqm FTE figure from the
2010 report.

3.62 The nature of business parks has changed, with a lower presence of light industry
activity and a greater focus on space for research and development and office activity.
This is much more pronounced than suggested by previous guides with the growth of
major new campus based research activities across the UK which tend towards the
provision of B1a and B1b floorspace.

3.63 The more innovation and science focussed R&D sector, associated with the
knowledge economy and life sciences activity, incorporates pharmaceuticals,
biotechnology, industrial technologies, creative industries, and technology, media and
telecoms (TMT). This sector benefits significantly from agglomeration and the
clustering of activity with similar uses and higher education institutions.

Distribution
3.64 The 2010 Density Guide identifies two forms of distribution activity: the General
Warehousing and Distribution category and the Large Scale and High Bay
Warehousing category, both falling within the B8 use class. The 2010 Guide
suggested that “technological developments and restructuring in most industrial
sectors is setting a trend for an increase in floorspace per head so that average
density is likely to become lower over time”.

3.65 However, our analysis suggests that whilst some factors have decreased the density
of employment (such as increased automation within the order picking activity) these
have been more than offset by the wider range of job roles required to ensure the
distribution facility functions. Similarly changing shift patterns towards 24 hour
working as distribution needs increase are also offsetting reductions in the number of
workers per shift.

3.66 The rise in zero-hours contracts has been a recent trend in the employment
conditions of the distribution sector, particularly where activity is linked to the retail
sector and therefore staffing requirements more seasonal. However, consultation
with the industry has suggested that the impact on total staffing levels has been
relatively small to date, and certainly outweighed by wider drivers of change

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considered below. These contracts represent a relatively new shift for businesses
and therefore the full effects are not yet understood or quantified.

3.67 The warehouse and distribution sector provides a range of employment opportunities
at a range of skill levels, which is supported by research by Prologis2 undertaken with
occupiers of their own sites, indicating the following activities:

 warehouse staff (including forklift drivers)

 drivers

 admin

 managerial

 other (inc. ICT, customer service, sales and engineering).

3.68 This increasingly diverse range of employment opportunities within the distribution
sector was supported by research undertaken by Skills for Logistics on behalf of the
South East Midlands Local Enterprise Partnership (SEMLEP)3.

3.69 The Prologis research was originally completed in 2010 and benchmarked findings
against a similar study by Cranfield University in 2003, allowing some degree of
objectivity in the data and research approach. Comparing the two studies shows a
number of trends that suggest employment densities have changed within the sector.

3.70 Firstly, the data shows a broadening of activity types between the two surveys, with a
greater range of activities in the ‘other’ category, most notably ICT support.
Furthermore, the data shows a reduction in the proportion of workers employed at the
lowest levels of ‘warehouse staff’ decreasing from 68% to 43% of the total workforce.
This fall has been offset by increases in the share of workers within admin,
managerial and ‘other’ roles.

3.71 Given the shifts in the sector’s occupational profile it is unsurprising that actual
employment densities have risen in recent years. When calculated by Prologis in
2006 they estimated distribution activity employed one person per 95sqm, however by

2 Prologis: Technical Notes 2011 – Do Distribution Warehouses Deliver Jobs? (http://www.prologis.co.uk/pdfs/technical-notes-

1.pdf )
3 http://www.semlep.com/resources/uploads/SEMLEP_LOGISTICS_REPORT_2013_final.pdf

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2010 this had increased to one person per 77sqm. This is a significant increase in
employment density for the distribution sector, highlighting the increasing number of
employees that can be supported by new, modern high quality distribution floorspace,
even with significant increases in the scale of floorspace. Despite increased
mechanisation and deployment of technology the data suggests that as logistics
becomes more specialised both a greater number of employees and range of skills
are required to operate a modern distribution facility.

3.72 A later update to the Prologis research was published in May 2015 4 suggests that
densities have increased even further to around 69sqm per employee, largely driven
by an increased share of jobs within office-based activities. Despite this research
having tested this through consultation with others involved in the industry and based
on our own understanding of the sector through a range of agency and employment
land projects it would appear this level of density is not yet the ‘norm’.

New Categorisation Definitions

3.73 Our review of the influences on property planning and utilisation list above has
suggested that the density matrix needs to consider a new approach to classifying
employment generating spaces. This involves the identification of different
‘categories’ of space that sit within the use class framework. Below we provide a
short definition of each new category.

3.74 These categorisations have been tested with a range of stakeholders through the
consultation process informing this update to the Guide. They have also increasingly
formed the basis of other research undertaken by both industry bodies (such as the
BCO) and public sector agencies (such as the Greater London Authority or Local
Planning Authorities).

Office

3.75 The Corporate sub-sector is defined as including the following business types;
energy, engineering, food, manufacturing, mining, property and retail. The nature of
the corporate sub-sector, which incorporates a proportion of space designated for

4 Technical Insight from Prologis UK - Distribution Warehouses Deliver More Jobs

(http://www.prologis.co.uk/downloads/technical-insights/prologis-technical-insight-jobs.pdf)

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client meetings and functions, reception space, and internal meeting and break out
space, means that there is a requirement for additional floorspace which cannot
accommodate any additional full time employees. This has the effect of reducing the
efficiencies of the floorspace occupation for this sub-sector, despite space efficiencies
achieved through flexible working approaches.

3.76 The Professional Services sub-sector is defined as including the following business
types; lawyers, accountants, management consultants and property companies. This
sub-sector has a wide distribution of employment densities depending on specific
uses, more so than for other sectors. Two key business types which exemplify this
distribution are management consultants, which commonly adopt flexible working
practices facilitating the achievement of relatively high densities, compared with legal
firms, which adopt a more structured, less flexible approach to space allocation with
many more client meeting rooms and therefore achieve relatively lower densities.

3.77 The Public Sector is self-explanatory in its inclusion of central government, local
authorities and the third sector. This sub-sector again has a requirement for cellular
offices and meeting spaces and, for local government ‘civic’ buildings, public spaces
in order for the full range of services to be provided. These tend to drive lower
densities. However, increasing requirements for public sector efficiency are
increasing densities through the introduction of more flexible working and shared
services across previously separate entities.

3.78 The Technology, Media and Telecoms (TMT) sector is very diverse and
incorporates a wide range of tech, media and telecoms businesses ranging from small
start-ups to large corporates. This diversity is identified as being contributed to by the
way in which some large scale tech and media firms have large corporate
environments adopting flexible working and a dense use of floorspace, where other
more creative firms (which include significantly smaller firms and start-ups) have
much more creative space consuming approaches to their working environment.

3.79 The Financial & Insurance sub-sector is self-explanatory in its inclusion of banks,
building societies and insurance companies etc. This sub-sector tends to have high
employment densities given the provision of trading floors and, to a lesser extent,
more open plan floorspace with fewer requirements for client meeting and breakout
space. There has been little change in the nature of office occupation in this sector

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beyond the more general impacts of improved technology allowing more flexibility and
efficient desk sizes, as discussed elsewhere.

Workspace

3.80 Our analysis has suggested there us a need to include a broader definition of
workspaces that seek to provide a base for small and start-up businesses. The sector
is becoming increasingly diverse, and our current understanding of the most common
typologies is set out below.

3.81 Incubator – There is no set definition of an incubator in property terms as their form
will be developed in a bespoke manner to meet the needs of the particular business
activity or sector they are seeking to support. In essence incubators are high
specification managed workspaces that provide a high level of service in terms of
technology, equipment and business support. Within scientific sectors incubators will
often provide shared laboratory space alongside cellular offices.

3.82 Studio - Studio workspaces are usually artist spaces that can be operated as
standalone, individually occupied units within a range of settings or as part of a more
managed collection of spaces. Traditionally these have come forward in locations
with an industrial heritage given the building types these locations provide; they tend
to be similar to ‘light industrial’ units in their specification but are likely to include some
integrated desk space.

3.83 Maker Spaces – These spaces provide an ‘open workshop’ within a light industrial
type unit. They provide a single shared space for working which provides a range of
tools and machinery aimed at reducing costs for small and start up production
businesses. Maker Spaces tend to be run on a membership model where businesses
rent time within the space and time using the large equipment separately.

3.84 Co-Working Spaces - Co-working space tends to consist of a large open plan office
area offering shared desks where businesses work alongside one another. They
often provide small meeting rooms and conference facilities alongside shared
workspace. Operationally they tend to work on a membership basis with businesses
having access for a pre-determined amount of time per month, although many do rent
desk space on a permanent basis to provide an anchor tenant.

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3.85 Managed Workspace - A managed workspace is commercially rented serviced

premises from which small businesses can trade. The delivery of managed
workspace could potentially accommodate a range of spaces, from small office suites
through to workshop and light industrial units. The principal focus of these spaces is
on providing more formal, individual spaces for small and start-up businesses with a
number of shared facilities such as meeting rooms and reception services with an on-
site management. These tend to be orientated towards meeting ‘general’ business
needs rather than target specific sectors or activities.

Distribution

3.86 Greater importing of both finished products and production components from a range
of global locations (most notably China and the ‘Far East’) has driven the demand for
a new network of distribution spaces within the sector generally. These tend to focus
on two distinct offers:

 National Distribution Centres - where bulk loads of imported goods are

processed, sub-divided and shipped (largely via road freight)

 Regional Distribution Centres – these centres play the role of distributing goods
to end users, either in terms of retailers or manufacturers or, increasingly, direct to
clients.

3.87 A third distinct offer, which is a newly emerging type of space relating specifically to
the retail sector is local / ‘final mile’ distribution centres. This accommodates ‘final
mile’ parcel distribution companies who move goods from RDCs to individual
consumers. These tend to focus on meeting the distribution needs of online retailers
who lack the scale to have their own distribution networks, and are known as
fulfilment centres.

Data Centres

3.88 Our consultation with leading industry advisors suggests that datacentres have a
completely different employment impact than other storage facilities and therefore
require their own classification within the matrix.

3.89 There are also different types of datacentre currently operating and being developed
within the UK, which generate different employment levels, these are:

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 Wholesale Datacentres - where 1 or 2 corporate businesses occupy a dedicated

data centre

 A Dark Site Data Centre - which is managed remotely, so there are considerably
fewer staff

 A Co-location Facility - where a customer leases a smaller space within a data

centre, which could have up to 15 occupiers, with the site managed on site by a
service provider.

3.90 Whilst the size of datacentres can vary significant, with ranges from 4,000 sq m to
30,000 sq m (NIA) there is very little difference in employment generation from size,
with operational model the key driver. Even within each classification there are wide
variations in density:

 wholesale: 200 to 950 sqm

 wholesale dark site: 440 to 1,400 sq m

 colocation facility: 180 to 540 sq m

3.91 To further complicate matters data centre space is not always quoted in terms of floor
area, they may be quoted in terms of the cooled IT equipment area, which often only
accounts for circa 50% of the total floorspace.

Hotels

3.92 The hotel sector has become highly differentiate on the basis of quality, with the star
rating system failing to capture significant differences in the levels of service provided
within the sector. As the market has become more segmented in the UK new
categorisations have become common which reflect international categorisations.

3.93 These terms can broadly be explained as:

 Limited Service / Budget – low cost hotels within the 1, 2 and 3 star category,
providing little or no services or amenities to guests. Examples include
Travelodge, Premier Inn, Ibis

 Mid-Scale – usually a part of a chain and can relate to 3 or 4 star properties that
target both leisure and business travellers, providing some dining and leisure
facilities. Examples include Hilton Garden Inn, Holiday Inn Express, Park Inn

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 Upscale – 4 or 5 star properties providing a range of services for leisure and

business travellers, often also include conferencing facilities. Examples include
Marriott, Grand Mercure, Crowne Plaza

 Luxury – 5 star plus hotels that provide full, high quality services to guests, most
often including restaurant, spa and other leisure facilities. Examples include
Sofitel, Inter-Continental, Ritz Carlton.

3.94 These figures assume employment within an individual standalone hotel, not
supported by a head office.

Cinemas

3.95 The cinema industry has been through major restructuring in recent years, which on
the one hand has seen consolidation of larger multiplex offers into larger centres
whilst also seen increased differentiation of offer (such as arthouse or formats aimed
at adults).

3.96 The introduction of more adult orientated or arthouse facilities has also diversified the
range of facilities within the cinema and often includes a bar and potentially
restaurant. With less automation and a greater range of facilities employment
densities within this market segment tend to be higher, however it is only a relatively
small part of the market.

3.97 Within larger mainstream cinemas improving technology has had an impact on
employment levels. The introduction of digital projection has removed the need for
specialist projectionists to be employed. Much of the cinema ticketing has now
moved online, reducing the need for cashiers and ticket sales staff within the cinema
itself, replacing them with self-service collection machines.

3.98 As a result there has been a significant reduction in staffing levels within the
mainstream cinema sector which, alongside a move towards larger multi-screen
facilities, has greatly reduced employment density.

Implications for the density matrix

3.99 Given the factors considered above it is clear there is a need to revisit both the
densities within the matrix and also the way spaces are categorised and considered in
the future.

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3.100 Some of the factors considered clearly require new forms of workspace to be added
to the matrix to enable it to be useful as the workspace environment changes. Others
confirm that there are nuances within the office, distribution, retail and hotel markets
that suggest an alternative characterisation is required that moves beyond a general
typology approach.

3.101 In the next section we set out the new density matrix which draws all of the research
together to provide a guide for future employment assessment. It should be noted
that this is a Guide only and that many factors beyond the scope of this Guide will
influence how space is delivered and used in the future. Some of these
considerations are set out in Section 4 of this report, but this is not intended to be a
definitive list.

3.102 Any use of the Guide and its density matrix will require the user to exercise their
professional judgement to identify any specific factors that may result in a different
employment output than is shown in the general trends within the matrix.

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4. Employment density matrix

Use Class Sub-Category Sub-Sector Density Notes
(sqm)
B1a General Office Corporate 13 NIA
Offices Professional Services 12 NIA
Public Sector 12 NIA
TMT 11 NIA
Finance & Insurance 10 NIA
Call Centres 8 NIA
B1b R&D Space 40-60 NIA lower densities will be achieved in units with higher
provision of shared or communal spaces
B1c Light Industrial 47 NIA
B2 Industrial & Manufacturing 36 GIA
B8 Storage & National Distribution Centre 95 GEA
Distribution Regional Distribution 77 GEA
Centre
‘Final Mile’ Distribution 70 GEA
Centre
Mixed B Small Business Incubator 30-60 B1a, B1b – the density will relate to balance between
Class Workspace spaces, as the share of B1a increases so too will
employment densities.
Maker Spaces 15-40 B1c, B2, B8 - Difference between ‘planned space’
density and utilisation due to membership model
Studio 20-40 B1c, B8
Co-Working 10-15 B1a - Difference between ‘planned space’ density and
utilisation due to membership model
Managed Workspace 12-47 B1a, b, c
B8 / Sui Data Centres Wholesale 200-950
Generis Wholesale Dark Site 440-1,400
Co-location Facility 180-540
A1 Retail High Street 15-20 NIA
Foodstore 15-20 NIA
Retail Warehouse 90 NIA
A2 Finance & Professional Services 16 NIA
A3 Restaurants & Cafes 15-20 NIA
C1 Hotels Limited Service / Budget 1 per 5 FTE per bed
beds
Mid-scale 1 per 3 FTE per bed
beds
Upscale 1 per 2 FTE per bed
beds
Luxury 1 per 1 bed FTE per bed
D2 Fitness Centres Budget 100 GIA
Mid Market 65 GIA – both types tend to generate between 40-50 jobs
Family per gym
Cinema 200 GIA
Visitor & Cultural Attractions 30-300 The diversity of the cultural attraction sector means a
very wide range exists
Amusement & Entertainment Centres 70 Potential range of 20-100sqm

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5. Further considerations & guidance

5.1 It is clear from the research that the relationship between economic activity, property
development and employment generation is changing rapidly. It has been impossible
to capture all of these complexities and nuances within a Guide that is intended for
more generalised use and needs to remain accessible to a wide audience.

5.2 Therefore, within this section we provide some strategic guidance and consideration
of other factors which influence employment density but are, as yet, not sufficiently
established or robustly evidenced to form generalised assumptions from.

Difference between space planning and space utilisation

5.3 The advent of new forms of workspace and the changes to office sector explored in
previous sections have meant that the way space is planned and the way in which
occupiers ultimately use it are increasingly diverging.

5.4 The regulatory framework for the design and construction of commercial buildings
within the UK sets firm guidelines for the provision of key emergency and servicing
infrastructure which relate directly to the level of employment within any one building
or floor within it. Whilst these apply across the commercial property sector they have
their strongest influence within the office sector.

5.5 At the basic level there is a difference between the current typical fit out assumptions
and the built specification of new office development. Whilst typical fit-out
specification has now moved towards 10 sqm/per person for a standard office they
are actually built to meet the regulatory requirements of a building that is being
occupied at 8 sqm/per person. Many developers are delivering buildings in this
manner in order to ‘future proof’ their buildings and ensure they have sufficient
flexibility to continue to accommodate changing working practices.

5.6 The regulatory framework, however, ultimately limits how efficient a building can
become with the 8 sqm per person level currently the maximum a standard office
could achieve (although this would be significantly different for a ‘trading floor’). The
core reason for this is the requirements for the provision of emergency escapes and
toilet facilities, which are based on the headcount of each floor within a building.

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5.7 Therefore, whilst it is potentially possible in occupation terms to achieve a density

above 8 sqm it would be uneconomic to construct a building that allows this and
meets all the safety regulations. This is partly a cost issue in terms of the
infrastructure required but also relates to the impact this has on the scale of servicing
cores and therefore the overall efficiency of the building these requirements create. It
is likely to deliver compromised floorplates which, in turn, are unlikely to prove
attractive to occupiers.

5.8 Therefore other methods of driving efficiency are being explored as occupiers seek to
reduce costs and there is a greater divergence in how different sectors function and
therefore utilise space. In some sectors and property types this is beginning to see a
move away from using the amount of space as basis for employment creation and, in
the future may require further changes to the approach of the density guide, however
at this point no firm conclusions can be drawn.

5.9 Hot desking and agile working have already driven up the effective density of office
spaces, albeit with some offset for increased provision of breakout spaces. The
efficiencies gained from these are exacerbated by further shifts towards greater
flexibility in workplace location, resulting in even greater acceptance of home working.
The prevalence of home working has continued to rise since the publication of the
2010 Guide, with 2014 ONS data indicating that almost 14% of the workforce now
works from home at least some of the time, up from 11% in 1998.

5.10 Increasing the utilisation space is particular high on the public sector agenda as cost
savings are sought as a result of austerity measures. Typically public sector agencies
are seeking a 20% increase in space efficiency, effectively making provision for 8
desk spaces for every 10 employees. This would bring occupation broadly in line
much of the private sector, albeit the BCO now report that businesses are moving
towards a 7:10 ratio of workstations to FTEs.

5.11 The establishment of membership based club rooms and co-working spaces has also
driven up the level of employment supported by a given amount of office space. The
flexibility of co-working memberships and the lack of fixed workstations mean a much
greater number of employees and businesses can be supported from a single
workstation.

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5.12 However, there are inter-relationships between agile working and co-working spaces.
Early indications are that some co-working provision is being used by those working
flexibly away from their base office. As such it is important not to over-state the
employment potential of co-working and to understand the make-up of members as
part of employment density calculations.

5.13 Essentially, these efficiencies mean that employment generation may be significantly
higher than a simple density calculation may suggest. However, this is not uniform
within, let alone between, occupier sectors and whilst the Matrix seeks to make
allowances for increased efficiencies as best it can further research is required on a
case by case basis, particularly where co-working spaces are proposed.

Approach to leisure/cultural attractions

5.14 The diversity of the cultural attraction sector indicates that providing a single density is
impossible, and even the range provided requires significant levels of specific
understanding to ensure employment estimations are accurate.

5.15 The complexity is increased further by the use of volunteers within some sectors such
as small theatres and museums, who enable the facility to function but are not
actually employed. Heritage attractions and zoos also add complexity as their staffing
requirements are intrinsically aligned with their offer and the intensity of management
this requires; as such they do not demonstrate any clear relationship between ‘space’
and employment levels.

5.16 Based on our understanding of the sector it is possible to provide some benchmark
proxies which can be used to calibrate where within the matrix range a particular use
may lie. However it is important to stress these should not be used as the basis for
specific calculations themselves. Given the specificity of these uses and their
employment it is vital primary research is undertaken to provide robust
employment estimates.

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Attraction Type Effective Density per

FTE
Small Theatre 350 sq m
Arts / Conference Venue 260 sq m
Mixed Use Venue 125 sq m
Commercial Visitor Attraction 120 sq m
Concert Venue 100 sq m
Large Museum 50 sq m

Shift working and contracting

5.17 As consumer and customer demands increase and businesses are seeking greater
operational efficiencies there have been some shifts in working hours and patterns in
the past decade. This has affected a number of sectors but most notably has
changed the way distribution and retailers operate. Many of these influences had
been addressed by the 2010 Guide and our research has not discovered major
differences in the assumptions made at the time.

5.18 The introduction of more flexible employment contracts has also made employment
more fluid within operations, with the level of ‘active’ workers able to be more easily
adjusted in line with required output. However, this has not really impacted the overall
level of employment and hence employment density of an operation, but may impact
how and when these jobs are deployed.

5.19 We have consulted with the operators and property industry representatives to test
how these changes have influenced employment and have based the Matrix on their
advice on total employment requirements. This has enabled us to understand the
staffing requirement (in terms of FTEs) that enables the particular activity to function
under industry standard operating patterns.

5.20 As such the density figures presented allow for usual hours of operation, such as 24
hour working within many distribution activities, and therefore do not requirement
adjustment to allow for these trends. However, at an operator or development
specific level it may be necessary to adjust the figures if they propose a significantly
different operating approach.

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5.21 At present it would appear that any changes to the shift working patterns have been
outweighed by other changes in sectors which have affected the relationship between
floorspace and FTE employment.

5.22 As discussed elsewhere in this report the recent shifts in contracting towards zero
hours contracts is yet to have a noticeable impact on employment density. Whilst it
may mean employment activity fluctuates over time our conversations with industry
stakeholders suggests that it hasn’t altered the overall level of staffing for a property
but provided more ‘flexibility’ for their utilisation.

Other types of employment generating spaces

5.23 The density guide focuses on the core commercial property typologies within the UK
as a basis for understanding how private sector development and potential public
support for commercial property delivery can support wider economic and
regeneration aims.

5.24 However, it is clear that these are not the only sources of employment, with a much
wider range of education, health, institutional and infrastructure related activities also
providing a considerable scale of jobs.

5.25 These are very complex development types and encompass a wide range of building
types, operational models and services which do not have a clear or identifiable
relationship between floorspace and employment levels and hence no ‘general’
employment density.

5.26 Rather than a space driven employment requirement jobs in these sectors are much
more closely related to the type of offer that the individual facility makes. As such two
identically sized spaces within the same sector can have significantly different levels
of employment.

5.27 As an example, employment levels within a hospital can vary based on any particular
specialisms in treatment, teaching and surgery they may have. Where they require
higher numbers of operating theatres or specialist care facilities these will have much
higher staffing levels than a hospital with more ‘general’ ward space.

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5.28 Similarly a school with a particular focus towards vocational courses may have a
lower employment density as the teaching spaces are larger than those for classroom
based more academically orientated activities.

5.29 In all of these sectors it is important to understand that employment is not necessarily
the primary driver of space design and utilisation. Spaces are designed and
constructed to meet a specific activity’s requirements with the level of jobs then
determined by what is required for that facility to function.

5.30 Some research has been undertaken previously into this field5 however no consistent
approach has been identified that can be more broadly applied. Given the bespoke
nature of property and then the specialised nature of activities within them identifying
simple density proxies would require significant primary research and would require a
separate Guide where each operation (or mix of operations) could be to be
considered on its own merits.

Changes to mMeasuring practices

5.31 The RICS has launched new professional guidelines on property measurement, the
International Property Measurement Standards (IPMS), which aim to bring
transparency and consistency to the global commercial property sector. Initially, this
updates the Code of Measuring Practice for office space, and will be further updated
to include residential, industrial and retail properties.

5.32 IPMS will become mandatory for chartered surveyors from January 2016. Whilst this
may potentially impact how density is measured in the future, we have found no
evidence of any impact to date on the way space is planned or utilised.

5.33 Clearly as use of the new standards becomes common place and is deployed across
all property types there may be a need to revisit or reframe the way the relationship
between floorspace and employment is described.

5 For example see “Planning for Prosperous Economies”, Bilfinger GVA, 2009,
www.gva.co.uk/WorkArea/DownloadAsset.aspx?id=2147488578

November 2015 35
Homes & Communities Agency Employment Density Guide 2015

6. Comparison of densities 2015 to 2010

Use Class Sub-Category Sub-Sector 2015 Density (sqm) 2010 Density (sqm)
B1a General Office Corporate 13
Offices (NIA) Professional Services 12
Public Sector 12 12
Tech 11
Finance & Insurance 10
Call Centres
8 8
(NIA)
B1b R&D Space
40-60 n/a
(NIA)
B1c Light Industrial
47 47
(NIA)
B2 Industrial & Manufacturing
36 36
(GIA)
B8 Storage & National Distribution Centre 95
General: 70
Distribution Regional Distribution
77
(GEA) Centre
Large Scale & High Bay
‘Final Mile’ Distribution
70 Warehousing: 80
Centre
Mixed B Small Business Incubator 30-60
Class Workspace Maker Spaces 15-40 Serviced Office: 10
Detailed explanation for the changes in
Studio 20-40
this category are provided in Section 3
Co-Working 10-15 Para’s 3.77-3.82
Managed Workspace 12-47
B8 / Sui Data Centres Wholesale 200-950 47
Generis Wholesale Dark Site 440-1,400 Detailed explanation for the changes in
Co-location Facility this category are provided in Section 3
180-540 Para’s 3.85-3.88
A1 Retail High Street 15-20 19
(NIA) Foodstore 15-20 17
Retail Warehouse 90 90
A2 Finance & Professional Services (NIA) 16 16
A3 Restaurants & Cafes (NIA) 15-20 18
C1 Hotels Limited Service / Budget 1 per 5 beds
Budget: 1 per 3 beds
Mid scale 1 per 3 beds
General: 1 per 2 beds
Upscale 1 per 2 beds
4/5 Star: 1 per 1.beds
Luxury 1 per 1 bed
D2 Fitness Centres Budget 100
Sports Centres & Private Clubs:
Mid Market
65 65
Family
Cinema 90
(GIA) Detailed explanation for the changes in
200
this category are provided in Section 3
Para’s 3.92-3.95
Visitor & Cultural Attractions (GIA) 36
30-300 Further Guidance is provided in Section
5 Para’s 5.14-5.16
Amusement & Entertainment Centres (GIA) 70 70

November 2015 36
Appendix I – Consultation and Engagement
To inform the development of the 2015 Density Guide one to one interviews were undertaken
with a cross section of occupiers, developers, investors and consultants from within Bilfinger
GVA and the wider industry.

To test draft findings and refine our understanding key representative bodies were invited to
review and comment on the study, including the:

 British Property Federation (BPF)

 British Council of Offices (BCO)

 British Council of Shopping Centres (BCSC)

 Royal Institute of Chartered Surveyors (RICS)

 Royal Town Planning Institute.

All interviews and other feedback has been incorporated into the analysis presented within
Section 3 of the Guide and used to inform the density assumptions used within Section 4.
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Publication date: November 2015