The reboot of the home and workplace
The pandemic has led to the world’s largest workplace experiment as homes have been turned into temporary offices on a global scale. The future of the workplace and even the home is being reconsidered, presenting opportunities for developers and investors
3 minutes to read
Takeaways
- The future of work, and hence the workplace, will be multi-locational and more flexible. Businesses will have to re-think existing strategies on where and how they plan to do business
- The workplace is no longer a binary choice between the office or home. More flexible workstyles are met with greater choice, be it working from the home, the office or another location. There will be a transition towards places that best support specific work tasks rather than entire roles
- Our Global Buyer Survey revealed 61% plan to work from home more often, which will drive demand for offices in homes
- More time spent at home could increase demand for urban logistics facilities and data centres to facilitate bigger remote technology networks
Globally, we are now in the second phase of this experiment whereby hybrid forms of work – with some continuing to work from home, some returning to the office, and some flitting between the two – has become the norm. This hybrid work-style will be more influential in the long-term evolution of the office than the first phase of enforced working from home.
The scale of flexible working is evident from Google’s mobility monitor, which measures activity in different locations compared to a baseline at the start of the year. Across 20 countries there was on average 56% less activity in formal workplaces. At the end of July this figure sat 21% below baseline and reflects the steady re-occupancy of the office.
The new multitude of workplace settings will face changes. The approach to work will influence the future form and function of the office. Those who best understand the impacts will be better placed to benefit. Commercial real estate occupiers will have to re-think their strategies on where to locate as it’s no longer of utmost importance to occupy a city centre.
There has been much conjecture since the start of the Covid-19 crisis about the death of the office. Covid-19 does not lead to the demise of the office but it does expedite its evolution. The office will become less a space for administration, processing or concentrated tasks, which can be delivered remotely. Instead, the office becomes a crucial hub for collaboration, creativity, social interaction, corporate culture and staff training and development.
Occupiers will move towards resetting their office portfolios in terms of quantum, quality and, in some cases, location in order to deliver spaces that deliver these broader benefits to their staff and underpin their businesses competitiveness. Unlike traditional thinking in the sector, occupiers future space requirements are not a binary choice between the office or home-working. Both settings (and more) will be required.
This has implications for the residential market too. Lifestyle properties with larger space and more rooms will become more favourable. This is increasingly borne out by our research, and 61% of respondents to our Global Buyer Survey plan to work from home more often. Homeowners are already looking towards more second home destinations as a primary home option as remote working rises in prominence. As homes become places of work as well as leisure, we also anticipate heightened demand for urban logistics facilities and data centres to facilitate bigger remote technology networks.
Amanda Lim, Partner in Knight Frank’s Flexible Office Solutions confirms that “the sentiment of occupiers has shifted. Everyone agrees there is still a need for office space for collaboration, training as well as employee wellbeing, we are social beings after all. Right now, there is a still a great deal of unanswered questions; How do I get people back into the office? Do I need to? How much office space will we require?
Realistically it will take a year or so of ‘normality’, without fear of commuting and the pandemic, to fully know the space requirements. Over that time those who are able to come out of long-term leases may opt to renew for a shorter-term or indeed move to a flexible workspace so they can evaluate how their employees want to work and shape their future real estate strategy.”