News and Insights
Photo Credit: Charles Deluvio, unsplash
The future of office real estateBy Ryan Fuld, Director of Acquisitions and Asset Management, America and Charles Silvey, Investment Partner, London.
The future of the workplace and its role within commercial real estate has been under considerable re-examination following the COVID-19 outbreak, with the key focus surrounding the existential question of the need for physical offices versus wide-scale adoption of Work-From-Home (“WFH”) and even Work-From-Anywhere (“WFA”). The argument goes: why would a person commute into the office instead of working effectively from home? And why would companies utilize, and pay for, such space to the same degree as before the pandemic?
While the data on working from home and productivity is still emerging, our view is that offices are essential for innovation, collaboration, advancement of company culture, development of human capital/mentorship, as well as an external brand image to clients. These elements cannot be supplanted from a digital work environment.
Work-from-home has proven effective for individual productivity and certain team projects (i.e. “task completion”), and we expect task-only roles to move outside the office more often. However, collaboration, culture and relationships remain critical to company success, to attracting talent and ultimately to propelling growth.
That said, remote/flexible working is a trend that is here to stay – in the post-COVID world, we expect employers will offer a balance between WFH and office-based working. Location and office design will become ever more important. A company’s office portfolio may rationalise and evolve, potentially mixing one flagship office location in a core gateway city, centred around a connective transport hub, with satellite offices in peripheral locations/cities. We will see an increased focus on trends regarding health and wellness within office buildings. Improved design, ventilation, outdoor/amenity space will become market standard.
Major gateway cities will emerge from this stronger and cities such as London, Paris, and NYC will continue to be essential office locations, with the office of the future centred around design, wellness, collaboration, and flexible working.