The effects of the working-from-home (WFH) phenomenon will vary from city to city but some are more vulnerable than others. Prague, Amsterdam, Munich, Budapest and Warsaw could be worst affected according to research firm Capital Economics.
Although large cities such as London and Paris have bigger workforces and a higher proportion of workers that can work from home, it does not necessarily mean that they will be worst affected, Capital Economics states in its latest European Commercial Property Update.
Generally, smaller and medium-sized cities are likely to be worse off because workers are proportionally more important to the city’s real estate.
WFH will persist more in cities where there are a high proportion of the industries that had a propensity for remote working before the pandemic. IT, communications and knowledge-intensive businesses are the main examples.
Students and tourists can offset some of the WFH impact
But Capital Economics focuses on the city-wide impact of WFH. Although London and Paris have high numbers of workers that could work from home, the firm said that the share of remote working and its impact on a city’s real estate is not one for one because, beyond the pandemic, tourism and student numbers are likely to return to near-normal levels which will compensate to an extent.
Remote working will have more effect in cities where workers comprise a higher proportion of the daytime population, such as Munich, Prague and Hamburg.
But the extent to which workers travel into the city to work will also determine the degree to which they continue to contribute to the city economy even if they work from home, Capital Economics points out. Cities such as Budapest and Warsaw, which have proportionally larger daytime inflows, are likely to be worse off in this regard.