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25.06.2020, 17:34

The Office is Here to Stay for Now

Real Estate, Americas
Despite boardroom discussion about the merits and demerits of the world's largest "work from home" experiment, a report from JLL suggests physical office spaces will retain their significance.

 

Citing similarities between the Covid-19 pandemic and previous economic downturns, "The Future of Office Demand" report concludes that the influences of distributed urbanization and workplaces in the near-term, and, ultimately, the need for employee wellbeing and productivity, will continue to drive demand for offices.  

 

After a three-month mandatory hiatus, corporations and their employees have largely adjusted to working from home successfully, but new surveys are pointing toward workers having a desire to get back to normal routines over working from home permanently.

 

"The global pandemic has forced many employers to reconsider the role of the office in supporting business culture and purpose," explains Christian Ulbrich, JLL's CEO. "Real estate demand follows economic cycles, so we know these unprecedented times are also creating opportunities for companies across the globe to reimagine their workspace needs as they return to the office."

 

Companies' location strategies may also shift, with greater emphasis on a diverse market ecosystem. In the short term, there will be an increased demand for some office-based activities to move to locally-accessible suburbs, and second and third-tier cities that make it easier for employees to connect with colleagues closer to home. This could also be an added asset post-pandemic, with the lack of commute being the element workers enjoyed most about working from home – according to nearly half (49 per cent) of respondents from a recent JLL survey of 3,000 office workers.

 

By studying historical trends of previous global economic downturns such as the 1990s recession, dot-com crash and 2008 global financial crisis, JLL understands how the corporate real estate market recovered as the economy was rebuilt. The unknowns surrounding the pandemic and the potential for a second wave of outbreaks make it difficult to predict the recovery time; however, the ingenuity of employers to enable productivity with alternative staffing and socially distant work spaces offer an encouraging outlook for office demand.

 

The past few months of mass working from home has given us clarity on the reasons for commuting to the office. Offices encourage collaboration, innovation, mentoring and team building – all things that technology struggles to replicate. In fact, the same JLL survey found that 58 per cent of office workers missed the office, with younger cohorts – those 35 and under – showing an even stronger desire to return (65 per cent). Human interaction and socializing with colleagues were the most missed element of the office (44 per cent) followed by collective face-to-face work (29 per cent) according to the  survey.

 

JLL's Global CEO of Corporate Solutions, Neil Murray, agrees with this outlook, adding: "Density requirements will change and there will be an evolution in how office space is used, designed and developed. But history, and our latest office worker survey, shows that the office is not going away anytime soon."

 

A survey by Gensler found only 12 per cent of workers want to work from home full-time, with 70 per cent responding they want to spend most of their week in the office.

 

Meetings, socializing and impromptu face-to-face interactions with colleagues were ranked as the top reasons for wanting to head back into the office.

         

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