Introduction
The seismic shifts in work dynamics triggered by the pandemic have had a profound impact on the commercial real estate sector, specifically affecting investors with office properties in their portfolios. As companies grapple with the decision to return to physical offices or embrace remote work permanently, a clear winner emerges from the debate: hybrid work.
Adapting Office Spaces: A Response to Changing Needs
A comprehensive report from real estate consultancy CBRE sheds light on the adaptive journey undertaken by office buildings, responding to the increased vacancy in spaces that no longer align with evolving corporate requirements. The traditional static leasing model is no longer viable, with companies now seeking more flexible solutions that reflect the reduced spatial demands of a workforce not tethered to daily or simultaneous office attendance.
The CBRE Office Occupancy 2023 report reveals a 40% reduction in transactions involving companies requiring over 2,500 square meters of office space. Similarly, operations with smaller office footprints have decreased by 25%. Notably, 23% of large enterprises maintaining office space have expressed interest in downsizing.
The Ascendancy of Flex Options
Amidst this redefinition of the office concept, flexible solutions, commonly referred to as Flex options, are gaining prominence. These options, reminiscent of coworking models, appeal to companies previously unconsidered for shared office spaces.
Paradoxically, despite the reduction in the total square footage allocated to offices, the Flex model allows for an average 14.1% increase in space per employee. This translates to fewer desks but larger work areas.
Hybrid Work Triumphs Over Remote and On-Site Models
Remote work has seen a twofold increase since 2019, stabilizing at 13.8% of the active population aged 16 to 74. The CBRE study notes that 11% of surveyed companies offer a fully remote work option. On the other end of the spectrum, the allure of 100% on-site work has diminished, with only 10% of companies offering no alternative. Emerging as the unequivocal victor in the workday model debate is hybrid work, striking a balance between physical presence and remote collaboration. In Spain, employees average 2.4 days of telecommuting per week, compared to the global and European average of 3.2 remote days.
This preference for hybrid work maintains office occupancy at an average of 60% to 65% of capacity, dipping to 25% on Fridays—chosen by 70-75% of employees as their preferred telecommuting day.
Post-Pandemic Office Habits: Silence and Video Conferencing
Post-pandemic offices not only witness a reduction in total space but also a transformation in space utilization, prompting building owners to invest up to 45% more per employee in renovations. These enhancements involve superior soundproofing materials to create concentration zones for employees accustomed to the quietude of home. Additionally, isolated areas equipped with video conferencing technologies cater to remote collaboration.
Shifting Perspectives: Office as a Collaboration Hub
The CBRE data underscores that changes in office space are not solely in response to evolving employee needs but are also geared towards attracting those resistant to on-site work, fostering team collaboration and cohesion.
Recognizing that some employees find greater comfort in remote work, companies are reshaping offices into more open and collaborative spaces. On average, closed offices and secluded spaces have decreased by 20%, while shared work areas have doubled, comprising an average of 21% of office space in 2023, up from 10% in 2019. Large meeting rooms have decreased by 40%, replaced by versatile spaces and informal meeting zones that have doubled in presence.
Luring Employees with Added Perks
Offices are increasingly positioning themselves as places to retain employees, with more space dedicated to services. Common areas, such as cafeterias, terraces, and libraries, now occupy 10% of office space, up from 8%. Offering unconventional additional services is emerging as a strategy for landlords to optimize their investments and repurpose vacant office spaces.
Conclusion: Navigating the New Normal
In the wake of the pandemic, the office landscape has undergone a transformative journey, adapting to the demands of a workforce embracing hybrid work models. This shift not only impacts the physical aspects of office spaces but also heralds a new era of flexibility, collaboration, and employee-centric design, ensuring that offices remain relevant and attractive in a dynamic and evolving work environment.