The SAPOA office vacancy report published in October 2020 revealed that the office vacancy rate of 16.7% was at a 16 year high. Overall rental growth was at a 2.2% sub inflation rate. The Covid-19 pandemic is far from over. Rental occupiers are reviewing their office space in terms of operating space requirements and work-space models.
The only movement in this sector of the property market is the increasing trend to
convert older grade C grade office space to residential apartments especially in the
inner city centres of the metros.
CBRE recently completed their second survey titled ‘The Future of Office’, November 2020. The initial study was conducted globally by senior executives within the property sector who reflected on how Covid-19 was shifting perceptions around work-space in terms of its location, design and use. Interestingly since June 2020 opinions have shifted yet again indicating that we are some distance from stabilising on the new normal and need further time for the trends to fully emerge. Workplace practices are evolving and the opinion’s of both employees and employers towards the office environment is fluid.
Virus transmission and health considerations are key towards determining when employees will be comfortable re-entering office spaces. Mid-2021 is a date put out by the real estate industry as a likely resumption date and this will only apply to 2/3 of the pre-Covid office workers.
81% of CBRE’s respondents expect at least half of their workforce to be ‘office-based’ in the future while 73% support ‘office-based’ employees balancing their time between the office, home and ‘third places’.
How is ‘third place’ defined? This is likely to be a more mobile option enabling a workforce to operate flexibly between office and home and collaborative ‘third places’. Where teamwork is required the collaborative design of the workplace will accelerate. Flexible solutions are attracting increasing interest with building designs suited to future lease options tending to be selected by purchasers.
For some companies the Covid lockdown was a testing time to see which employees had the necessary skills set to work efficiently from home. It worked for some, it didn’t for others. It doesn’t seem to matter the scale of business, co-working and flexible office spaces are becoming mainstream for corporates and start-ups alike. What are professionals looking for when they evaluate work space? Connectivity is my personal deal breaker, no connectivity equates to zero productivity and there is no work around. Then reception services, meeting rooms and the on-tap cappuccino are all important considerations.
In summary watch this space as our working space becomes more agile and dynamic and one size certainly does not fit all.