Many office occupiers have embraced remote working, made by possible by technology and the use of video conferencing. With Covid-19 this trend has accelerated and the world has become a very different place, with companies, landlords and communities having to adapt at an unprecedented pace. While there is a lot of uncertainty, it is important to look for the opportunities this situation will bring for those who adapt.
Over recent years we have witnessed occupational density increasing as air filtration and services become more effective per square foot. It has become apparent however, that not all desks are occupied all the time – many businesses typically see 70% of their desks being used. This has resulted in the rise of hot desking as a trend. Following Covid-19, these densities could decrease again to allow workers more space within the office - in the short-term complying with social distancing guidelines. However, in the medium term, many businesses could allow employees to divide their time between home and the office. At present this appears to be the wish of many. Whilst some functions may be easier than others to operate remotely, most businesses will still require physical office space. In the immediate term, businesses will continue to support remote working, however over time many will wish for a full return to offices, allowing employees to clearly separate work and home life, while enabling better concentration, stronger social connections and more collaborative working.
Office space will still be valuable for collaboration and generating ideas, so internal layouts need to adapt in ways that support this, while accommodating social distancing protocols. Additionally, it plays a vital role in the onboarding process, providing new starters with direct contact with colleagues in order to build relationships.
The social function and placemaking of the office is therefore important. Flexible working and social initiatives such as after work events, exercise clubs, baristas and breakfasts, have all become part of the fabric of office life. These added extras help make space more attractive to potential occupiers as they look to create a happy and motivated workforce.
Federated Hermes has implemented this at many of our properties, including our four Ascent buildings at Farnborough Aerospace Centre in the M3 corridor. Following the refurbishment of the Ascent buildings, we have introduced food trucks, and a community engagement calendar that includes pop up stores, health and wellbeing activities, charitable events, seasonal fairs, and even bee hives on the roof producing Ascent honey! The recent occupiers, Discover Financial Services in Ascent 3, primarily needed good quality offices but also expected additional amenities such as these.
As people begin to return to work, there will be a degree of caution, at least initially, with regards to the use of public transport, with many opting instead to walk, cycle or travel by car. At least in the short term, this will be an advantage for business park locations particularly in prime regional locations such as the M3 corridor and Ascent at Farnborough Aerospace Centre.
So, despite the chaos, confusion and uncertainty created by Covid-19, there will be many opportunities around the way we use offices, if we embrace this change, adapt and innovate.
The views and opinions contained herein are those of the author and may not necessarily represent views expressed or reflected in other Federated Hermes communications, strategies or products.
Stephen Ellis is Senior Investment Manager at Federated Hermes