JOAN MULLER: Recycling of empty offices may become world’s next big challenge
What to do with the glut of (half) vacant office buildings dotted across global business hubs? That’s a question increasingly occupying the minds of players in commercial real estate, a sector which has added so many new buzz-words to its lexicon it’s hard to keep up with the meaning of it all. We barely had a chance to wrap our heads around the “co-working” or “flex” office trend before the coronavirus rudely thrusted concepts such as “remote”, “virtual”, “hybrid”, “repurposed’’ and ‘’solo’’ work spaces upon us.
Whether or not you’re au fait with any of these phrases, one thing seems sure: the onset of Covid-19 has irrevocably changed how and where people work. And while the debate rages on about the extent that work-from-home and the “Zoom boom” will become a permanent post-pandemic fixture in our lives, urban planners, developers and real estate investors are already looking at ways to recycle what could become a growing tally of mothballed buildings in many of the world’s urban centres.
A newly published Financial Times special report on The Future of Cities, takes a fresh look at how big urban centres have again fallen silent amid the second wave of Covid-related lockdowns imposed in many parts of the world. The report raises a number of interesting questions, among others, whether this could spell the end of some global capitals’ economic and social dominance.
Andrés Rodríguez-Pose, professor of economic geography at the London School of Economics and Political Science, argues that the reduced need to commute given greater remote working, more online shopping, and less socialising will no doubt lead to less demand for space in city centres — not only for commercial and retail use but perhaps even for housing as the need to live close to the office reduces. “That means a redefinition of city centres”, he says. “The question is, who will have the best and brightest ideas for measures that will harness decline in commercial activity on the high street and promote other activities likely to be drivers of the new city centres?”
Francesca Bria, senior adviser on digital cities to the UN, says there was already a big trend of urban transformation away from the megalopolis and density of bodies in cities towards more distributed space. “Coronavirus is merely accelerating the trends that were there before.” She believes the pandemic could spur increased pursuit of “15-minute cities” and “superblocks” like that seen in Barcelona for instance — both urban planning concepts aim to bring residents’ work, leisure and shopping needs within self-sufficient neighbourhoods that can be navigated quickly with minimal private car use.
However, in its take on what’s likely to happen with post-pandemic demand for offices in global business hubs, international real estate advisory firm JLL reckons it’s less about companies reducing their square meterage requirements and more about changing the look and functionality of work spaces. According to JLL’s latest research report titled Reimagining the Future of Work, the post-pandemic workforce will expect various workplace options, including work-from-home, third-party space and offices with both collaborative and solo workspaces.
The report reads: “Hybrid work will be the new normal. Offering choices in the type of workspace when employees are not working from home will be key going forward.” JLL predicts that the amount of days worked remotely globally will likely double post-pandemic, going from 1.2 days a week on average before the crisis to 2.4 days. But work-from-home won’t make the office entirely redundant. The upshot, according to the report, is that the hybrid workplace of the future will have to be “more human” than ever before to support the diverse, changing needs of employees and mix of work styles.
But what will a hybrid workplace physically look like? In this Forbes piece, the author argues that alternative hybrid work models will require marked changes, flexible internal structures and layouts. For example, one strategy might be to have specific days for in-person meetings and collaboration while other days are allocated for remote work. In this case, the office could be reorganised by reducing cubicles and creating more collaborative meeting spaces.
Shifts in office demand and usage will of course also create major challenges for SA’s office sector, which was already labouring under an oversupply of vacant space before the virus hit in March. In its latest report on the office market, the SA Property Owners Association (Sapoa) says vacancies across SA reached a 16-year high of 12.7% in the third quarter, up from 11% in the fourth quarter of 2019.
More worrying is that Sapoa believes the impact of Covid-19 is “far from over” and that more office space could be dumped on the market over the coming months as leases come up for renewal. So it’s not unlikely that SA may breach its 15% all-time high office vacancy sooner rather than later.
*Muller is the FM’s property writer
This is a roundup of the best Covid-19 news from the web, brought to you in today’s FM lockdown newsletter.
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