December 6, 2021
At the height of the pandemic, there were plenty of predictions that mass home working would be here to stay, and the traditional office would become a relic of the past.
We now know differently. During this year and especially after the summer, we have seen a trickle back to office life become a steady stream as business spaces spring back into life. Government statistics state that in the first two weeks of November, around two-thirds (67%) of working adults in Great Britain travelled to the workplace at some point in a seven-day period, with only 3 in 10 reporting that they solely worked from home during that time. KPMG recently told its UK auditors that they will be expected in the office or at client sites four days a week in the future, a policy likely to be watched closely by other large employers.
These statistics suggest that a form of hybrid working is here to stay and yes, an out-of-date traditional office is likely to be obsolete – the FT has reported that the phrase “stranded assets” is being increasingly heard in relation to lower-quality office parks and sub-prime workplaces. However, a modern breed of office, in the right locations, able to satisfy the needs of occupiers in the post-pandemic world have an opportunity to thrive.
We believe in offices, as demonstrated by our commercial commitment to them alongside our focus on developing high-quality industrial and logistics space. However, there are lessons to be learned from recent experiences that should inform employers, investors and developers when considering what the office of the future should be like.
Employees value face to face collaboration
Collaboration, building company culture and ensuring junior team members learn from their more experienced colleagues all take time, and work. Because tasks could be performed remotely during the pandemic and businesses could tick over with staff working at home, some employers may have been tempted to mistake treading water for progress.
It’s true that businesses survived, and some perhaps even grew, during the lockdowns and their aftermath. But the decisions by major employers such as Google, Apple, Facebook and Goldman Sachs to bring staff back in demonstrates how much they value face-to-face collaboration in the workplace if they are to thrive and grow.
Some employers face the challenge that their people got used to home working and are reluctant to return. To get over this, some are now doing the reverse of what they did 18 months ago and bringing in a “circuit breaker” – where for two weeks, everybody comes into the office five days a week. People get back into the routine and start to see the benefits of being together again.
Good employers will always be supportive of some level of flexible and remote working but that will run alongside, not in place of, the office environment – as long as that environment is a good one.
Offices need to be better than before
When we can work with a blank canvas, we know that the office of the future often looks very different to those of the past. In a competitive recruitment environment, people will make decisions about who they want to work for on quality-of-life issues – the culture, the facilities and the location need to be attractive to lure them away from working from home. In a recent survey (Equiem - 2021 Global Office Tenant Report), occupiers rated relaxation zones, fewer desks and more workout areas highest among the desired features in their ideal office.
An office also has an element of prestige for a corporate brand. Some businesses may take less space but of a higher quality to create the right impression for employees and clients alike. Even in the industrial spaces we build, we include quality office spaces that reflect positively on the occupant.
All of this means we are likely to see a much larger gap develop between premium and secondary office occupation. Prime offices will become in ever shorter supply as standards get higher. This will provide opportunities for developers of prime office space and add some competitive tension in the investment market.
Sustainability has never been higher on the agenda, with the recent COP26 climate change conference raising the profile of green issues and making them a key consideration for developers, occupiers and investors.
The MEES (Minimum Energy Efficiency Standard) Regulations already require several sustainability conditions to be met before properties can be let in certain circumstances. Going above and beyond these requirements – and being seen to do so – will increasingly be crucial for brand and reputation, in attracting and retaining staff and when it comes to occupier decisions about which properties and landlords to choose.
As well as the environmental benefits of a sustainable approach, there are also commercial gains as better fuel efficiency reduces cost and makes properties more attractive for investors and occupiers alike.
Social wellbeing will remain high on the Environmental, Social and Governance (ESG) agenda, particularly in the wake of the pandemic when workers are taking wellbeing and work-life balance more seriously. As employers continue to value its importance in recruitment and retention, we expect to see an increase in measures such as showers to allow exercise during the working day, outdoor meeting and breakout spaces, and planted environments which can have a positive impact on stress and depression.
Location, location, location
It’s not just about what you are – where you are is crucial as employees and customers have more choice about where they do business or work. Adequate space for car parking (including electric vehicle charging), bicycle storage and shower facilities for cyclists, good public transport links, and access to restaurants and town centres are all key considerations.
We may also see a growth in satellite offices – for example, businesses that keep a presence in London but have several smaller offices more conveniently located for employees and customers. This could provide some great opportunities for well-connected, amenity-rich regional office locations.
We need to breathe more easily
Covid-19 has made us all more conscious of ventilation and the need for fresh air. However, even without the pandemic, the benefits to wellbeing and productivity of good ventilation and air supply are well documented.
Industry standards are rising here – it used to be the case that buildings were designed with an air flow of 8 to 10 litres per second per person in mind, but recommendations from the British Council for Offices now refer to a minimum of 12 litres per second of fresh air per second per person and this is likely to increase further.
Regardless of how good a filtration system can be, nothing gets air flowing more effectively than windows that open – and these should be used wherever possible. Outdoor meeting spaces – such as roof terraces – also give employees options to combine the working day with a breath of fresh air.
Another insight from the Equiem’s 2021 Global Office Tenant Report is that touchless access control and indoor air quality are among the highest-rated features desired by occupiers returning to the office.
The challenge of video conferencing in the office
Most people who worked from home during lockdown used video calling – either for the first time or at least more than ever before. Those who were fortunate enough to have a dedicated work-from-home space without distractions may well find it challenging to hold video calls in the office when colleagues are around.
This is a particular problem for hybrid teams, where a proportion of the team may be at work while communicating with colleagues who are at home. Video meetings are here to stay, so offices need to be built with them in mind. Video calling cubicles with conferencing facilities built in are one option – but that could become prohibitively expensive for businesses with a large number of employees.
Offices need to be designed around the needs of individual employers – or at least be flexible enough to adapt to varying needs.
The polarisation of offices is inevitable with the best spaces in sought after locations continuing to thrive, while poor stock in secondary locations will likely become redundant. Time will tell how many occupiers will reduce their office footprint due to the new hybrid way of working but how offices are used will definitely change. Creating offices for the future will require flexible spaces that can adapt to meet the needs of your customers, their staff and stakeholders.
Find out more about Kingsbridge Estates properties here.