With COVID-19 forcing the Real Estate sector to rethink the way they work, market demand for office space has rapidly changed. As a result, the focus of the office has evolved: from property assets to people.
John Williams, Head of Marketing and Research at Commercial Property Specialists Instant Offices provides an insight into the biggest commercial real estate (CRE) predictions of 2021 that are expected to bring significant changes to the market in the next 12 months, which suppliers will need to adapt to – or else get left behind.
Office Space Locations Will Change
The corporate footprint will become more dispersed and diverse as more people demand office space closer to home. The need for more agility will lead to an increase in demand for quality office spaces in urban and regional areas. While this will inject investment into such places, this trend may see demand outstrip supply. Meanwhile, the cost of office space in city centres like London could decline as more companies shift away from city skyscrapers.
Demand for office space in suburban and rural locations grew during the lockdown, and this trend is set to continue to reduce commute times and maintain work/life balance as more people continue to work from home.
Flexible Workspace Options Will Increase
While flexible workspace is still less than 1 percent of the total global office market, this is soon to change. Companies across the world are looking to increase their flexible office portfolios — something which is reflected in vacancy rates of commercial spaces across the world:
Manhattan vacancy rates are at a 24-year high.
Hong Kong vacancy rates are at a 21-year high.
Singapore, which traditionally has low vacancy rates, has seen vacancy rates increase consistently since Q1.
A Successful Workspace will be Measured by the Employee Experience
The metrics defining the success of a workplace will shift towards focusing on people, processes and location.
With lockdown allowing more flexible working styles, we will see an ongoing shift towards office spaces that are influenced by employee needs, including varying working hours and less lengthy commutes. Different office options will become available to accommodate the end of the rigid 9 to 5.
Staff Wellbeing Will Become More Significant Than Ever
With the return to work after COVID-19 on the agenda, our research shows that space-related plans are considered the second most vital feature of today’s offices. With the pandemic having brought health and wellness concerns to the forefront, we expect this sentiment to evolve.
We Could See The Demise Of Traditional Offices In Favour Of Collaborative Spaces
Portfolios will be reduced by up to 40 percent, and the office space that is still used will be centred on a more collaborative design rather than the traditional office layout. Research has shown that those working from home struggled the most with sharing ideas and connecting to the organisation and colleagues. Therefore, the office space of the future will focus on fostering these aspects of working life.
2021 Is Set To Be A Record-Breaking Year For New Supply Of Flexible Workspace
Flexible workspace is forecast to increase by 21 percent in 2021 — the largest flexible workspace growth is ever seen. Overall, office space’s footprint is set to change in size, location and nature, with an ongoing theme of increased focus on people’s needs. With businesses prioritising their workforce’s needs in terms of location, flexibility and working style, it’s up to suppliers to match new demand. We expect to see this reflected in numerous ways, with a shift from expenditure on large central “hubs” towards small, convenient and localised offices.
For more information: https://www.instantoffices.com/en/gb
