Up to one in four firms will relocate their corporate headquarters after the pandemic in order to improve office amenities or adjust workplace strategies within the next three years, according to the latest edition of Knight Frank’s (Y)our Space report.
The firm forecasts significant activity in the office market during the next few years with competition for the highest quality and best located space.
“There will be a flight to quality space, with 92% of firms planning to increase or retain the same level of quality in their offices,” the firm said in a statement.
After a year of restricted access to their offices, businesses still identify their workplaces as an essential component of corporate identity, KF said.
The firm surveyed 400 international businesses with total staff of 10 million and among the conclusions Knight Frank drew was that companies regard offices as vital for retaining and reinvigorating employees post-pandemic.
Of those surveyed, 90% said real estate is a “strategic device” for their business. About 49% named “corporate brand and image” as the top strategic priority fulfilled by real estate. And 37% thought offices are a tool for improving employee wellbeing, collaboration, and for attracting and retaining talent.
30% of companies plan increase in amount of office space occupied
KF also said that 30% of firms plan to increase their total office space within the next three years and, in total, 65% of firms plan to grow or stabilise their current level of space.
Tech firms will be the biggest drivers of demand for office space. About 39% of those firms planning to expand identified as technology, media & telecommunications (TMT) businesses. Of those, 70% are planning to increase their global footprint by more than 10% of its existing size.
“Global firms are looking beyond the pandemic and are focused on how their workplaces can enhance corporate culture and re-engage employees in a new age of agile working,” said the firm’s global head of occupier services and commercial agency William Beardmore-Gray.
“There is a mood of change in the air. We are seeing a re-familiarisation with the office beginning in many big cities around the world. Firms want to give employees the best of both worlds, allowing them to work flexibly, but making their offices the best possible experience, which means delivering higher quality and more engaging workplaces.”
Collaborative space and hot desking both on the up
Over the next three years 47% of respondents said they will seek to improve the quality of the space they occupy, 55% said they will create more collaborative spaces within offices and 54% plan to implement desk-sharing or hot desking.
Occupiers’ biggest frustrations with landlords are a lack of flexibility (29%) and a lack of innovation in product or service offering (21%), highlighting the need for landlords to invest in operations, property management and tenant services.
KF said that it is encouraging that 60% of respondents said they had experienced increased or significantly increased communication with their landlord during the course of the pandemic.