Nothing is certain but it looks like it the office is changing in a major way.
There are lots of different opinions on the future of the office and Work from Home (WFH). Opinions range from things going back to the old normal to predictions of the death of the office with everyone working from home or working from anywhere.
Many recent articles suggest that organisations will reduce space substantially and that the majority of people want to continue to WFH. We will, apparently, be freed from the hell of open plan workspaces, redundant office buildings will be turned into vertical farms and we have a unique opportunity to reshape the urban landscape. We will save money and time by not commuting, nirvana is just around the corner.
There are, however, alternative reports of how we are becoming fed up with WFH, that we miss the camaraderie of the office, that we can’t mentor new joiners. We long for the glass of wine or a team beer after work, we have zoom fatigue and it’s costing us a fortune in heating bills. We have no aircon in the summer and we will, they argue, jump at the chance to get back to normal, the old normal and put the Covid nightmare behind us never to be thought of or mentioned again.
Unsurprisingly perhaps there are a lot of us who believe the future lies somewhere in between. That we will adopt hybrid approaches where we will work in teams that each spend 2-3 days in the office and the rest WFH or working near home within walking distance. We will mix zoom calls with real life interactions and we will have the best of both worlds.
We see this mix of views reflected in the market; whilst some corporates are looking to reduce their space others are increasing theirs. In late January, Law firm Latham and Watkins committed to occupying 200,000 sq.ft. at 1 Leadenhall from 2026. They are not alone; Baker McKenzie expects to grow its London presence and believes the office will continue to play a vital role in face-to-face team and client working.
The Evening Standard recently quoted Richard Proctor, head of London tenant representation at Knight Frank, who said: “The flight to quality continues amongst law firms, as evidenced recently by Linklaters, Baker McKenzie and now Latham & Watkins. As the war for talent continues, so does the need to provide first class, client-centric office space in which lawyers can focus, collaborate and achieve the vital “subliminal learning” on which the continued success of their business depends.”
Brookfield CEO Bruce Flatt believes investors are underestimating how quickly people will return to their offices and points to the return of staff to their offices in Australia, Dubai and Shanghai. He believes offices are important in building a strong culture.
A recent report by Grant Thornton, however, reports that 74% of corporates they surveyed anticipate decreasing their existing footprint by up to a quarter with a further 12% expect to reduce their space by up to a half. We have also seen some major occupiers announce reductions in office space including Sales force and Standard Chartered.
Somewhere in the middle of these two extremes is the ides of the hybrid model, Standard Chartered, announced late last year that employees will have the option to select both time and location flexibility; this could be in Standard Chartered offices, a near-office premises, or from home. They are partnering with a third party to provide additional ‘near-home’ workspace. It is anticipated most employees will fall into a hybrid pattern, i.e., some days in the office and some days working from home, but a number will prefer to spend 100% of their time either at home or in a Standard Chartered office.
JLL’s CEO Christian Ulbrich has said they have clients pushing to get back into the office – their focus is to really improve the health and wellbeing of the employees to ensure they all feel very comfortable there. And we have the complete other spectrum of clients who don’t want their employees back in the office – want to ensure their health and wellbeing is met when they work from home”
So where does this leave us? Upsizing? Downsizing? A flight to quality? WFH? it all points to a massive change in the office market. One obvious effect is that we will be sharing spaces a whole lot more, it’s almost inconceivable that we will have our own dedicated desk in the new hybrid workplace if we are only in the office 2-3 days a week and our employer has reduced overall space by a third. Already a trend pre Covid these changes will accelerate hot desking, the right sizing of meeting rooms, and a focus on efficiency.
With change comes complexity and managing real estate just got a whole lot more complex. There will be new anxieties to deal with – do I need to get in at 07:00 just to get a desk? How do I make sure I sit with my team if I don’t have my own desk? Will there be enough meeting rooms? Will social distancing be enforced? Will it be clean, healthy and safe? If the office of the future is going to deliver we are going to need desk level booking systems, more reactive cleaning cycles, better more appropriate environmental controls a better more organised reactive cleaning regime.
Then, just for fun, lets toss net zero and improving the user experience into the mix. Both good and laudable directions of travel. After all our property and construction industry is the one of the worst polluters and biggest energy users on the plant. Smaller offices use less energy, but we will have to desk share, new buildings are carbon expensive, but they are more energy efficient in use. How do we maximise employee comfort and improve the user experience? We are going to have to monitor air quality, comfort and make sure we don’t waste energy by heating lighting and cooling space we don’t use or under use. We are going to have to make our buildings pandemic resilient. And this will be difficult.
At Beringar, we are here to help. We believe in data driven decision making, giving CRE professionals appropriate and timely data that inform the choices that need to be made. We provide a fully end to end solution to measure, collect, and analyse occupancy and environmental data (CO2, light, noise, temperature, air quality) in buildings. This gives you the evidence to plan, monitor, and manage your new complex office environment and it establishes a data infrastructure layer that will allow truly smart and autonomous buildings to evolve.
Beringar – Building Intelligence.
