COVID is a major driving force of change in the office occupier market. The shift to working from home has only accelerated growing trends for flexible working and has transformed how many businesses operate.
The ever-evolving needs and expectations of tenants is putting pressure on landlords to adapt their existing properties. Today, details such as the functionality, interior design and amenities of an office play a much larger role in tenant acquisition and retention.
Sustainability, smart building technology and digital workplaces are also reshaping offices. All these factors combined are likely to profoundly change the future of office refurbishments.
This blog looks at the changing requirements of workplaces and the five key factors that impact office occupancy rates in a post-pandemic world.
1. Location
As the digital landscape evolves and remote working remains common place, the physical location of the office may become less important for many businesses and workers. Even after restrictions end, it is unlikely most people will go back to working in an office full time. Those within a short commute might still consider working from central offices, however employees that have a longer journey may end up becoming more accustomed to working from home.
If trends continue, it is likely more and more businesses will change their working models permanently. Either companies will move other to a hybrid working model where employees will have the freedom to choose a balance between home or office-based working. Or businesses will adopt a distributed model with either smaller localized workspaces or allow individuals to work remotely at any location such as coffee shops and coworking spaces.
The post-pandemic world will shape the future of office space as we know it, with more companies having a wider variety of flexible working models available and employees able to choose where they want to work from based on their needs.
Landlords should plan ahead and consider how to accommodate an increasingly remote workforce. Whether that involves splitting large office spaces into small units or converting their buildings into coworking spaces.
2. Offer Flexible Spaces – Multi Functionality
Multifunctionality is becoming an important strategy to improving occupancy rates. Not only do multifunctional offices help maximize the buildings space but they also encourage higher levels of productivity through catering to an array of tasks.
Tenants are more likely to continue to renew their lease when they are able to effectively maximize their offices square footage. When it comes to providing this type of office, it is important to plan the space out effectively. This could be something as simple as creating an open-plan office that can be divided into zones rather than having different rooms.
Multifunctional offices are becoming more common in both new and old buildings and these spaces often have higher occupancy rates because they work well for many different types of businesses.
3. Interior Design and Layout
73% of UK workers use an open-plan office, yet this layout has suddenly become riskier since the COVID-19 pandemic. Especially considering previous studies revealed sick leave increases by 62% in open-plan offices.
Even before the pandemic, opinions about open-plan offices were split. Some either found open-plan layouts distracting and intrusive while others believed it contributed to team collaboration and innovation.
Most companies are now considering how they will change their corporate workspaces. It is likely open floor plans could be redone with better consideration for personal space and cleaning regimes. Adaptability will be key, with the ability for spaces to flex so that it can accommodate social distancing and be able to partition spaces.
4. Amenities
There is a growing appetite amongst businesses for amenity-rich spaces that support enriched workplace experiences. As hybrid working styles take root, this will be an important factor in appealing to new and existing tenants.
Buildings with amenities such as ample parking spaces, on-site fitness facilities, outdoor seating, game rooms and loungers, and full-service food and beverage providers are among the most desirable for attracting tenants.
Noise levels, general décor, small meeting rooms, informal work spaces/break-out zones, toilet facilities, tea and coffee and other refreshment facilities are also important factors in maintaining tenant satisfaction.
Landlords should consider what type of amenities they would like their building or office space to offer. This could be as simple as having a kitchen setup for employees to use or offering an onsite gym.
5. Building Performance and Maintenance
One way to improve occupancy rates is by making sure your building is well-maintained and safe for the people who are using it. Businesses want to rent office spaces that provide comfortable working environments and support employee productivity.
If you’re not keeping up with routine maintenance, your assets will break down and require costly repairs or replacements. Big-scale items, such as HVAC systems that can impact buildings’ clean air circulation, are not only essential to maintaining comfort conditions but they also play a pivotal role in preventing the spread of viruses such as COVID-19.
Overall building performance is an influential factor on office occupancy rates. However, it is well known that buildings tend to not operate as efficiently as they are supposed to. A common cause of this problem is changing the use of a building.
Change of use is a common widespread issue in commercial office buildings. Plant, equipment and controls are often not adapted to meet the current needs of the building as it progresses throughout its life.
Refurbishment and alteration of internal floor space from open plan to cellular offices for example often negate to consider the layout of services such as fan coil units (FCU’s), location of thermostats and supplier air grills on ventilation, and air conditioning systems. This leads to occupational discomfort, dissatisfaction, loss of productivity and importantly, high energy use.
It is important when considering internal layout and refurbishment projects that building services engineers and controls specialists are consulted not just the fabric specialists, as is often the case.
Landlords are faced with a unique challenge as the world of work continues to evolve. The number of people working remotely is on the rise, and many companies have adopted flexible hours or even eliminated set office times altogether. This means that landlords need to adapt their buildings in order to remain competitive by accommodating these new ways of working.
