What will be prevailing topics for the office market this year? We share an article with insight and analysis made by Sharry, a company developing the advanced software for friendly office buildings.
Sublease, 3-2-2 as a new standard, 5G deployment, employee wellness or Hub & Spoke. Briefly, these are the buzzwords you will hear for most of this year in the office market. Based on what we see in Sharry if we analyze our internal data sets, listen to the current demand from our clients, and when we try to read between the lines of all other reports and predictions.
1. Healthy pressure for the office comeback
Although we've got a vaccine – and hopefully it'll be a game-changer – the pandemic has still shone a light on the importance of health in the workplace. It will be crucial for the tenant's trust recovery and their office comeback.
Commercial spaces will now have to take everything from soft precautions (health declarations in the building's mobile app, smart cameras with temperature sensors, or touch-free solution to call an elevator) to “heavy metal” technologies (UV light to inactivate Covid-19 or robot cleaners), as well as heightened cleaning standards that will need to be in place especially for high-touch areas and HVAC systems.
Mobile access is an easy way how to avoid unnecessary touches. In the photo – Connected by Skanska solution developed by Skanska and Sharry deployed at Parkview office building in Prague.
Buildings will have to demonstrate these improvements to all users, supported by a third-party certification authority like the International WELL Building Institute, which promotes but also puts pressure on employee well-being. According to NTT, employers are having to think hard about optimizing the wellness and safety of their workspaces, using relevant technologies including data, analytics, security, and automation.
2. Working neither at work or at home?
Forget working 9-to-5 and get ready for a new standard 3-2-2; three days in office, two days remote and then two days off. It's a trend promoted by large tech companies like Google, but also preferred by employees. According to PwC Canada’s survey, only 37% of respondents want to be in the office most or all of the time.
But rather than work from home, Sharry believes in the work from anywhere. They are talking not only about alternative workspaces in cafes, but what about sharing a desk in a shopping mall or a hotel's lobby? Accor, a world-leading hospitality group, has already launched a plan with WOJO to become the largest coworking brand in Europe by 2022.
Get ready for a hybrid model of real estate. Infographic by Vladimir Mašinský from Sharry
3. Many more tenants under one roof
Uber is looking to dump a big chunk of a huge new NYC office it recently signed. Advertising and PR giant Dentsu will cast off glitzy NYC offices. AT&T could cut hundreds of thousands of square feet of office space. – These are just three examples of the big shift in the commercial real estate market.
We will see more and more tenants looming on the horizon and re-evaluating their properties. Nearly 70% of CEOs said they may reduce their office footprint in the coming years, according to a KPMG survey. It will be an opportunity for growth for all serviced office providers and coworkers.
But on the other side, it will generate a necessity to implement an integrated software solution to manage the subleased spaces and related or shared services. (See also multifamily assets in part no. 4) More (sub)tenants in the building bring more recurrent duties for property managers. In the second place, it should accelerate the adoption of digital tools for automation.
One Vanderbilt high rise in NYC became an epitome of the 21st century workplace. Drawing by Vladimir Mašinský from Sharry
4. Not only one company address
When you combine trend #2 and trend #3, you'll possibly get the “Hub & Spoke” as a result. The decentralized office model consists of the company HQ (with eventually smaller floor area) located in the city center and a wide net of regional sub-hubs close to the community to decrease the work commuting distance.
CBRE describes it as a “Hub & Spoke 2.0”, with central HQ, regional offices, coworking space, and home office giving employees a chance to occupy the right workspace for their activity. To quote IWG: “It has been proven that flexible working increases productivity, profitability and employees’ work-life balance.”
The largest part of the workforce will be hybrid workers that come to the workplace for a portion of a week. This will dramatically shift how these assets are used and valued. Homes will increasingly become a place of work and leisure but also center points of retail and goods delivery.
Will it be a new standard for companies to give out “allowances” to their newly remote workers as we already saw last year? Will it be the beginning of the era of multifamily or mix-used assets?
The Hyllie Terrass – the project aims be a passive office building with zero environmental footprint.
5) ...and loads of tech gadgets
It would be a very long list to name all of the technologies and innovations expected to invade the office market in 2021. Just to name a few of the “gadgets”: The time is now for artificial intelligence to shine, Forbes promises. Why not take AI to predict parking occupancy? 5G services are expected to launch worldwide with more than 50 operators offering services in about 30 countries by the end of 2021.
We'll see a massive improvement in the building construction towards sustainability. Skanska has announced its plan for the first net-zero commercial property in Sweden and later in the Czech Republic. The delivery increase will lead to greater adoption of smart lockers to support social distance and flexibility.
And get ready to meet the robots – at least they don’t get the coronavirus, as the Nobel Prize winner Joseph Stiglitz has pointed out.
Co-written by Josef Šachta, Vladimír Mašinský and Lukáš Rozmajzl from Sharry. The article was originally published on Unissu.