Roddy Allan, Chief Research Officer, Asia Pacific, JLL, predicts we can expect an acceleration of changes to office design, while also ensuring that spaces continue to be fun, engaging and inspiring.
Trend 1: On co-working spaces
JLL research still predicts that 30% of all office space will be consumed flexibly by 2030, be this within corporates’ own offices or through third party operators.
Flexible space will take a different form than it has in the past, but will continue to grow as corporates and investors alike respond to the increasing demand for flexibility. Coworking operators have experienced a dramatic boom-bust cycle, and COVID-19 presents some unique challenges for the industry, but the future of real estate will retain many of the key elements that helped fuel this disruption.
As tenants return to their offices, business continuity and operational resilience will be top priorities – and since flexible space is fast and easy to acquire, companies are likely to turn to flex solutions to support portfolio reductions potentially more so if they are in expansion mode, however still cost conscious, in an attempt to avoid capital expenditure. In a revived post-pandemic market where adaptability is high on the corporate agenda and the purpose of the ‘hub’ office is centered around collaboration, flexible space demand and growth will return to its impressive pre-COVID rates.
Trend 2: On why work from home has had to work, but it is not a long-term solution for all organisations
The pandemic has shifted perceptions around the scale, effectiveness and potential of remote working. Work from home has worked in a large part in Asia Pacific during the pandemic, because it has had to work. That does not however mean that it presents a sustainable and optimum long-term solution for all corporates.
Throughout the pandemic across Asia Pacific, an average of 68% of employees surveyed by JLL regionally worked from home. Employees across Asia Pacific have successfully transitioned to remote working, but our interactions also suggest that many now crave the office environment's cultural and human experience.
In Singapore, 54% of local respondents missed the office while working from home. Young people, including Millennials, have found it easier than all age groups to work from home because they embrace technology, but they are also the biggest group wanting to get back to the office. Why? It’s because the office is an extension of their personal lives. They want to get that sense of belonging and community back, which a remote home environment cannot offer.
In addition, most surveyed employees would favour a hybrid model combining more flexible work arrangements in the future, as they now also enjoy greater flexibility and control on their personal and professional lives.
Some key trends we’ve identified include:
- Office space is here to stay: Higher acceptance of remote working will lead to a more distributed and diverse workforce but this will come with its own challenges on productivity and efficiency. Office space will continue to hold its importance, in most instances as the optimal working environment.
- Offices will be reimagined as social hubs: The office provides a culture that can’t be replicated via remote working and serves as a social hub for employees to connect on common goals, purpose and vision. Repurposed or redesigned work areas will be required to provide infrastructure for collaboration among the split teams of remote and on-site staff.
- Future footprint will facilitate choices and flexibility: Corporates will have to redefine their real estate footprint, and operate with home offices, co-working places, satellite offices and the office HQ will all have to co-exist – leading to a truly hybrid office model.
Trend 3: On the death of office, or rise of space consumption changes
Many predicted the advent of the internet would kill the office building. Yet, Asia Pacific office stock has grown more than five times since 1995. Discussions are now ongoing about hybrid work arrangements and workplaces today, but many questions remain about its implementation.
At this stage, major occupiers are telling us that they are planning 82 desks per 100 employees, versus 91 desks per 100 employees pre-pandemic.
However, we do not think this metric necessarily translates directly into less office space, rather, office spaces will be reconfigured over the medium to long term to create more collaboration and meeting areas as the importance of the office as an innovation and collaboration hub intensifies. At the same time, 94% of occupiers are telling us that they intend to take more higher grade office space in the future over lower quality office towers.
Many technologies that were seen as nice-to-have — from apps on mobile phones to control lighting, temperature and audio-visual equipment, to doors and elevators that open with corporate badges — are being added to reduce employee contact and ensure cleanliness. 58% of corporates are highlighting to us that health and wellbeing investment are two of their top priorities. At the same time, 70% or corporates plan to invest in remote technologies to create a more flexible work environment. We believe this is not a case of either “work from home” or “work from the office”, rather, the future workforce will be empowered to “work from anywhere” with the office still as the central heart of this.
We can expect an acceleration of changes to office design, while also ensuring that spaces continue to be fun, engaging and inspiring. After all, physical spaces are important to the psychology of an organisation. The workplace is a “badge of honour” that invokes a sense of pride and belonging.
Knowing that organisations will place a premium on space will mean companies may recalibrate the amount of leased office space upon lease expiry, or even before. There will be a focus on delivering the most efficient space utilisation to meet the end-user objectives. We have seen clients in the Asia Pacific put greater emphasis on sustainability, wellness and technology to enable these objectives. Some have begun making environmental tweaks and upgrades to align with commitments of building trust and ensuring fit-for-purpose spaces.
It is important to keep in mind that what the future of work in offices looks like will not be a one size fits all solution. Organisations are going to be more cognizant of how spaces will house employees. This is an opportunity for building owners and landlords to rethink their long-term building development plans or any re-fitting/upgrading works, and for employers to ensure that they create environments that foster engagement and productivity over the medium-to long-term.
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