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“The Coronavirus Has Shown That People Want to Be Together at the Office”

Article July 20, 2020

Article

Covid-19 has slowed down the Czech real estate market, but it has also helped the spread of innovations and brought healthy offices into the limelight.

Even though the real estate conference organized in mid-June by Stavební fórum (Construction Forum) Magazine bore the name “Kanceláře včera a zítra” (“Offices Yesterday and Tomorrow”), it primarily focused on how things look on the office real estate market today.

So then – what is the current situation? A total of 3.68 million m2 of modern office spaces is available in Prague, and according to Prague Research Forum, only 5.4% of it is vacant. Finding good spaces – especially those larger than 1,000 m2 – is not entirely easy. Roughly half of the offices under construction have already been rented out.

Ondřej Vlk, head of market research at the consulting firm Knight Frank, noted at the conference that in the first quarter of 2020, activity on the real estate market began to slow down. 69,600 m2 have been rented out, representing a year-to-year drop of 37%. However, this is the result of an expected general economic downturn in combination with low office availability last year.

According to Lena Popová from BNP Paribas Real Estate, the main reflection of insecurity regarding future economic development is that while companies would decide to relocate and sign a rental contract for seven to ten years before the coronavirus, they prefer obligations of three to five years here today. For most companies, the main current priority is cost savings – which is one reason why many are considering renting out a portion of their spaces or extending their lease in their current spaces rather than relocating.

A NEW KEY

As noted by its director for Hungary and the Czech Republic Alexandra Tomášková, developer Skanska Property is reflecting the changes in office buildings brought by the coronavirus and has put together an internal team capable of implementing heightened hygiene measures for its projects under preparation.

“The coronavirus has accelerated certain trends. This primarily concerns PropTech and safe and healthy work environments.” Skanska Property is therefore now investing more work into, for example, air circulation equipment in their projects, the allocation of internal space in future space plans, and various types of disinfection, both across the board and specially for individual workers’ locations. The Connected by Skanska smart operating system and mobile app, developed by Skanska as a standard part of each of their projects, will contain new functionality – a digital key.

Connected by Skanska is installed at Parkview office project in Prague-Pankrác.

“Contact-free, using just your smartphone, you can enter a building, call an elevator to bring you to your desired floor, and open the door to your office. We’ve tried out this key in our Spark building in Warsaw, we’ve received very good feedback from tenants, and we’re thus adding it to our standard offering of digital services,” Tomášková described.

WE WANT TO GO BACK

Petr Palička from Penta Real Estate is convinced that “we are not preparing for a new world. And the coronavirus has mainly shown that people do want to be together and to get back to the office.”

In his opinion, the pandemic has dissolved the mystique of work from home and emphasized the benefits of corporate culture, including a space used in common, a shared mood, and effective cooperation, where it’s enough to meet up with workmates in the kitchen and work out a number of things in an informal atmosphere directly, without having to call everywhere for half a day.

The speakers at the “Offices Yesterday and Today” discussion meeting also concurred that even if our economy is no longer booming, Prague offices will make it through the next two years without major problems. And location and quality will be the keys to success.