COVID-19 changed the way people work and while the value of the office space temporarily lost its appeal, 90 per cent of business leaders, according to a recent survey by Knight Frank, recognise the importance of real estate to business strategy, which has increased by five per cent since 2018. The difference is that corporate needs have changed since the pandemic.
“There is no question that real estate will continue to matter strategically to businesses as they build back better from the pandemic, but the form, function, quality and quantity of that real estate will be significantly transformed,” explains Dr Lee Elliott, Head of Global Occupier Research, Knight Frank.
From sustainability objectives and brand identity through to retaining and attracting talent, the workplace is increasingly shifting to reflect these changes and to serve new purposes.
New Expectations from the office space
The top three factors identified by survey respondents from Knight Frank’s ‘(Y)OUR SPACE’ report for why real estate matters most were brand image, cost reduction and employee wellbeing. The responses were drawn from close to 400 international businesses, reflecting global office real estate requirements.
Brand Image
Part of this quality shift points towards real estate as a strategy to support a brand’s positioning and image. With a workforce largely shifting between locations, now more than ever, the office represents an opportunity to reflect a company’s core values and mission as well as facilitating engagement for all those who interact with the business, whether that be clients, employees or customers. The more thought that goes into creating a space that is brand aligned, the better positioned the company will be to support the organisational culture.
For job seekers, a work environment is likely to be a stronger push or pull factor in the decision to choose one company over another, and provide them with an image of the brand that lives up to its promise and offers richer amenities.
Cost Reduction
The pandemic has witnessed a rise in cost-saving measures, which is closely connected to the workplace, whether that entails relocating or managing the office space more effectively, one thing is certain – more than 90 per cent of businesses surveyed are planning to elevate or at the very least keep quality at the level it’s currently at to ensure the experience of being at work is functioning in favour of employees, clients and prospective staff alike.
Employee Wellbeing
While the nine-to-five fixed office routine is unlikely to resurface, recruitment, onboarding, interaction and socialising will be key considerations when designing an office space that supports these activities. Just over half of respondents plan to increase collaborative spaces, including desk-sharing.
“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,” says William Beardmore-Gray, Global Head of Occupier Services and Commercial Agency, Knight Frank.
Top 5 Facilities to Consider
With hopes to improve the amenities available to staff reported by 46 per cent of interviewees, the top facilities companies plan to include are:
- Onsite food and beverage (65%)
- Gym facilities (47%)
- Cycle storage (46%)
- Mental health facilities, such as sanctuary spaces (45%)
- Click-and-collect facilities (45%)
As companies rebuild themselves, employee wellbeing is particularly relevant to meeting new business goals and re-engaging employees with flexible work arrangements and an office space to work in that is better aligned to reflect these changes. Over the next three years there will be a greater focus on mental and physical health coupled with wellbeing and safety.
Unsurprisingly, 60 per cent of the respondents from the survey reported increased communication with their landlord over the pandemic period, which hints at a new trend – stronger partnerships between tenants and real estate owners, and hopefully more flexibility, which was highlighted as a frustration by 29 per cent of occupiers.
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