Offices: Returning to a new normal

The future of work and the future of the office are almost synonymous and how both might change was a hot topic well before the pandemic. But key the words ‘future of work’ into Google now and there is an eye-watering harvest of hits. Paul Strohm reports.

Probably everyone knows someone, who knows someone, who works for a firm that found that working from home through the covid lockdowns “worked really well”, such that they “don’t actually need an office anymore”. 

Meetings with staff and clients conducted via Zoom or Microsoft’s Teams have indeed worked well, enabled them to function through lockdowns while saving time and money that would otherwise have been spent on commuting or on international travel. So some, generally smaller, businesses have given up their leases to save money and (as the trump card thumps down) the environment.

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On the other hand, there are those – some with an interest in property it has to be said – that counter with arguments along the lines of “remote working impedes essential, inspirational interaction between team members”, and “it makes training younger team members very difficult while curtailing their ability to network”.

Meanwhile, from the shop floor, there are those, probably on a lower pay grade than the foregoing, who may not have a home office that enables them to shut the door on the day job in the evening, or the kids and their toys during the day. Many of them are desperate to the point of screaming to return to the office.

Hybrid office model

Although the work-from-home genie has well and truly fled the bottle, a global survey conducted by JLL in November 2020 revealed that while 72% of employees want to continue working from home on a regular basis after the crisis – most for at least two days per week – 24% want to work exclusively in the office. Crucially, 70% favour a hybrid model. 

The JLL survey also found that, post pandemic, work-life balance has overtaken securing a comfortable salary in terms of importance to office workers, by 72% to 69%. Meanwhile, 74% of respondents were attracted by a four-day working week. 

Avison Young head of research Nick Axford says: “The vaccine rollout means plans can firm up as we move to the new normal. We will start seeing how occupiers are going to respond. But it is not necessarily a constant, people are going to be trying different things.”

‘More small intimate spaces will be required… probably big open-plan spaces where you had 100 people on a floor are a thing of the past.’

Peter Barbalov, Farrells Architects

The immediate result of Covid-19 and the resultant lockdowns was that office take-up in Europe fell 41% year-on-year in Europe in 2020 according to research from BNP Paribas Real Estate. It slipped from more than 11 million sq m to below 7 million sq m. Bucharest, Dublin and London were the worst-hit cities with falls of more than 50% while Amsterdam and Luxembourg were least affected with declines of 16% and 18% respectively. 

A bounce back can reasonably be expected, but the extent of it is less clear. The work-from-home revolution has been foretold at different points over several decades and there is almost a cry-wolf label attached to it now. But early adopters of hot desking and the emergence of companies like WeWork are testament to the fact that there is no longer just one model of office working 
or occupancy.

Working from home has established itself as part of a new work culture, says Olaf Janßen, head of real estate research at Union Investment, but this does not necessarily mean traditional office space will become a thing of the past. “Quite the opposite, in fact,” says Janßen. “Video conferencing is no real substitute for in-person meetings with colleagues and social interaction in the office.”

Janßen says that secured long-term access to attractive office space will be a vital part of a hybrid workplace for companies. In the post-coronavirus world, core properties will serve as anchor space for brand identity, for attracting talent and for functions that need to be carried out in person. 

WeWork has demonstrated there is more than one way to work in an office

“These anchor spaces will be supplemented by flexible, mobile and increasingly digital-based workplace models in a way that will only begin to take shape in the coming years, depending on the individual industry,” says Janßen. 

Some of the changes to the office necessary for the return to work post-lockdown are physical and technologically based, introduced to make it possible to access space and work while Covid remains a threat. Among these are enhanced air handling and filtration, ionisers, touch-free building access, surfaces that – especially in washrooms – are hostile to pathogens, and phone-based technology that warns when people’s physical proximity is unsafe or staff are gathered too densely in a particular area. 

“The legacy of the pandemic will be better air quality, better facilities and more space,” says Cain International head of European real estate Richard Pilkington. “Buildings were jammed, people were packed into ever smaller spaces, but that won’t happen anymore.”

Offices repurposed

Europa Capital head of research and strategy, Vanessa Muscara, adds: “With 60% of office buildings in Europe over 20 years old there is an opportunity to repurpose offices to some certified green status. There is evidence that tenants in green certified buildings achieve 26% higher cognitive scores.”

Peter Barbalov, design partner at Farrells Architects, adds: “My gut feeling is that there will be a variety of offers. I think that more small intimate spaces will be required. Probably the big open-plan spaces where you had 100 people on a floor are a thing of the past.” However, he believes there may be a combination of the two that means there is no overall diminution of the space requirement but that offices end up being less densely used because some staff are working from home at any one time.

‘Video conferencing is no real substitute for in-person meetings with colleagues and social interaction in the office.’

Olaf Janßen, Union Investment

If offices are used at lower density, space requirements could actually increase and Pilkington says some companies are looking ahead and leasing bigger offices, reversing previous decisions. “We’re already seeing people who thought of downsizing and are now taking more space,” he adds.

But office-based companies may also look more closely at office form – whether they are low or high rise – and the locations which the most suitable form implies.“Offices are really divided into lower tier buildings of three to five storeys in reasonably good locations; offices in highly dense residential areas, which serve a purpose; as well as towers such as in the City [of London] and urban centres,” explains Keith Breslauer, founder and managing director of Patron Capital. “Towers are really tricky. You can spend 40 minutes commuting and 30 minutes waiting to get into the lift.” 

One thing is certain, however: offices are not dead, either as a workplace or investment option. “Offices are a core element of a company’s strategy, they are part of the brand,” says Schroders’ European real estate analyst Oliver Kummerfeldt. “The office is definitely not dead, it has a great future.”

Gdansk centre sets the standard in wellbeing

While the pandemic has turned the attention of office owners and users to practical and technical measures such as air quality, the looming competition between home and office is encouraging an examination of the softer attractions of the workplace.

Polish city Gdansk’s Olivia Business Centre has long followed a policy of creating a people-centric environment at the 200,000 sq m scheme. The policy was a direct result of a conversation with branding expert, the late Wally Olins, who visited Gdansk in the early days of the development.

“He said focus on people, not on the buildings,” says development director Jake Jephcott. “We had a feeling for that but to hear it from him was a real endorsement.”

Cultivating a sense of wellbeing – Olivia Business Centre, Gdansk’s glazed tropical Winter Garden takes shape between the office towers

Creating a sense of community has been one key element with sports clubs, art and cultural events intended to create bonds. Among the latest additions is a ‘pocket garden’ (pictured right) between two of the centre’s buildings which has been conceived as “an enclave of plant life in a compact urban development”, a concept pioneered in New York. 

Through the lockdowns the business centre has been creating an enclosed tropical winter garden with thousands of plants, of around 150 different species and furnished with benches and eating places. The aim was to create a space for less formal meetings and relaxation which would stimulate creativity, irrespective of the weather. 

Early in the health crisis, Olivia became one of the world’s first commercial properties to implement ion air purification technology to create a safe environment free from Covid and other pathogens. 

The technology works in combination with the ventilation system and removes 99.4% of viruses and bacteria. It was introduced in conjunction with measures such as active titanium coatings in common areas such as elevators and lobbies.