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The future for the office market post Covid-19

The future for the office market post Covid-19

Thursday, 25 June 2020

How will the perceived increase in working from home impact the UK office market and will it be long-lasting? Read the thoughts of Chantal Molony, Associate at South West-based PAI member Vickery Holman.

Some may be sounding the death knell for offices but as with many aspects of our lives, we will need to adapt to find new opportunities as we recover from this pandemic. The way we work and live has been turned upside down.

For years, the office has been the place to go to for work. Lockdown provides an opportunity to change that. There will still be a need, though at a lesser extent, for face to face meetings to encourage collaboration and brainstorming. Therefore, the design and sizes of offices may change to reflect this. Rows of desks may be replaced with spaces to bring teams together to work collaboratively. Individuals may axe the commute in favour of home working, using the office only as a community space.

A scarcity of capital may result in an unwillingness by companies to invest in physical office space. Flexible workspace operators may benefit with flexible lease terms and attractive terms, with ‘easy in, easy out’ more popular. 

Co-working spaces will obviously need to adjust in order to survive too. Office space will have to be altered in order for people to feel safe being there. Fitting as many people as possible into one location will not be acceptable. That could mean a reversal of the open office trend, returning to office cubicles and dividers to offer employees more privacy and space.

Innovative working systems may become the norm, with companies rethinking the use of office space, reducing the size of their office footprint, encouraging working from home and office working patterns with teams on rotas. Companies will need to reflect on whether they should keep their office spaces, one of the most expensive costs with resultant overheads. Companies with a strong team-oriented ethos will cite productive relationships and company culture to support keeping their office space while accepting that remote working practices using Microsoft Teams and Zoom seems to be working for many.

Nonetheless, working from home all the time is not for everyone, and many want to return to the office. Conversely, people might resist being sent back into offices after they have enjoyed the luxury of never changing out of their pyjamas! We may also see a shift towards employees who want a degree of flexi-working at home and in the office. Previously, employers have been sceptical about working from home due to concerns over productivity levels, but the forced lockdown has meant that many of those assumptions and barriers have been removed. In fact, more home workers mean that it’s easier to increase the space around office desks.

Of course, there is a lot more at play than just what employers and their employees want. The economic impact will probably force many employers to evaluate and reduce costs. Allowing employees to work from home and consequently reduce their rental overheads is an easy solution, one that is less painful than redundancies. 

Prior to the pandemic, at our Market Review, we projected positive growth in 2020 for office space in Bristol. Technology companies and professional services firms contributed to a significant portion of that growth; however, these are the types of companies that are most likely to be able to take advantage of smaller office footprints and home working. The economic impact for the South West could be significant. The longer this goes on, the more accustomed we become to the new ways of working. 

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