By Sam Compton
Hybrid Working and demand for a ‘Third Space’ on the rise
The World Economic Forum has reported that McKinsey believe 90% of companies anticipate a move to a hybrid operating model where employees are split between their office and home – however, as part of this approach, a third way of working is “growing increasingly popular”.
The potential monotony and distraction of working from home constantly for 18 months led to almost 2.2m people worldwide opting to work, at times, from a flexible office space during 2020 (128 times more people than in 2010).
This desire to have access to a third space is a feature of modern tenant expectations and is here to stay; as found in recent research conducted by Verdantix (May 2021), companies deem access to a premium third space as a key tool in attracting and retaining talent (see Figure 2 in the Verdantix report). This is because of the expectation end-users have around premium, remote working experiences (see Figure 3 in the Verdantix report).
Sources:Read more here
Demand for flexible space in the UK up 37% in H1 2021
Demand for flexible space is bouncing back from what was a difficult end to 2020. This increase is driven by employers wanting to bring workers back into an office whilst offering talent a better work-life balance with reduced commuting times.
This increase in the short-term is supported by the longer term trend of organisations taking a “shorter term view of their real estate portfolio”. Consequently, average lease times have decreased from 10.4 months in June 2020 to 8.9 months in June 2021.
It’s a similar story in the US. According to Bisnow, who quote data from Upsuite, demand for flex office space increased 41% nationally from Q1 to Q2 this year.
Sources:Read more here
RICS Publish their latest Global CRE Monitor
The Royal Institution of Chartered Surveyors (RICS) recently published their latest Global Commercial Property Monitor; their monitor acts as “a quarterly guide to the trends in the commercial property investment and occupier markets” and tracks sentiment as well as the state of supply and demand within commercial real estate.
RICS reported that sentiment among global investors and occupiers has improved for the fourth successive quarter; demand for office is either flat or improving as a general rule across North America, Europe and APAC. Despite this, in the US, some major cities are faced with office oversupply (RICS, Global Commercial Property Monitor, page 5), making it more important than ever for landlords to differentiate their offerings.
Source:Access RICS global monitors