Since the advent of coronavirus, large-scale working from home has become the norm for multiple industries. The trend looks set to continue, with one survey from Gartner showing a quarter of companies expect 20% of staff to work from home in the future. Mark Zuckerberg predicted that 50% of Facebook employees could be working remotely within the next 5-10 years. A study from the University of Chicago estimated that up to 37% of jobs in the US could plausibly be done from home.
The challenges and opportunities of homeworking have been covered elsewhere but in this three-part blog series, we explore how large-scale homeworking will change the world. Today, Part One examines the impact on property-related sectors. Read on to find out more.
Offices
The crisis is forcing companies to rethink their office footprints and real estate needs. If a chunk of the workforce continues to work remotely, the amount of physical space a company requires is reduced – by as much as 20%.
As companies look for flexible and scalable office solutions, downsizing will likely be a key trend. As a result of lower demand, the value of large office buildings in large metropolitan areas will decline. Whilst the Covid-19 crisis continues, this will be exacerbated by the challenges of working at height. Health organisations are advising that people avoid using lifts, except in very small numbers, so the challenge of transporting several thousand people to the 40th floor of a city tower block is a significant one. Companies will be looking for buildings with their own lifts, or premises at a lower level where employees can reasonably be expected to use the stairs. The demise of the penthouse kicked off by 9/11 could be completed by Covid-19.
This could trigger other events: perhaps we will see large office buildings converted to a mix of flexible office space, residential accommodation, gyms, and other entertainment options. Converting offices to residential use could help to ease the housing crisis in many large cities.
The role of the office is also up for debate. For example, companies may allocate homeworking for focussed individual work and their physical headquarters for collaborative working, such as strategy and idea generation meetings, client events and opportunities to build culture, with some WeWork-style hotdesking capability. That is a different proposition to a physical space with fixed desks which employees are largely expected to attend every day. Commercial property companies will need to evolve to provide the type of space companies require.
Where social distancing requirements are in place, there will be a need for flexibly configured office space and infrastructure. This will put commercial property developments into a broader competitor set alongside work membership clubs and co-working spaces.
With fewer people filling up offices, we will see a rise in the number of co-working spaces and office memberships. Networks such as the Hive in Asia Pacific offer office space by the hour or day with different prices for a flexible desk rather than a consistent one.
If you don’t want to commute yet don’t have a comfortable space to work from home, you may want to co-work locally. Interaction with other people and busy surroundings can help motivate workers to stay focused and productive. WeWork, which experienced a turbulent period before the crisis, could benefit as companies explore co-working options.
Only about 10% of large commercial property leases roll over or reach the end of their terms each year, so it will take up to ten years for this trend to be fully realised. However, on a smaller scale some of these changes could be seen in towns and smaller cities within a couple of years. Â As the large financial institutions reduce their expensive head office space, we could see a revival in the local branch network once more, with workers going to an office space much closer to where they live.
Warehouses
Demand for warehouse space will rise as the Covid-19 crisis accelerates rates of e-commerce across sectors. With increasing amounts of shopping done online, warehouses effectively become the new retail space. As online shoppers around the world increasingly expect same day delivery, within a one hour agreed time frame, local warehousing will be essential for maintaining happy customers.
The rise in homeworking may prompt a dramatic change in where employees choose to live.
For example, in the UK, many people opt to live in London and the South East primarily due to the range of job opportunities in the region. However, this comes with expensive rent, cramped living conditions, long commutes, and limited opportunities to get on the very expensive property ladder, a pattern repeated in major cities around the world. In LA, companies such as Pod Share offer bunk beds in communal homes, providing a co-living experience to young LA professionals.
If work is no longer so firmly tied to location, the primary deciding factor for where to live may become broadband speed and reliability, rather than commuting time, giving homeworking employees a far wider range of options for where they call home. This could prove beneficial to businesses, as it will enable them to look beyond big cities for talent which would mean a wider pool of candidates and potential savings on salary costs.
There may be an uptick in flexible rural workspaces with open spaces and plenty of parking. In turn, we could see a revitalisation of smaller towns and cities, as people question the need to live in crowded cities and locally based employees go back to their local high streets.
The death of the high street has been talked about for years. With fewer office workers in the big city offices, popping out on their lunch breaks to make purchases or grab a sandwich from Pret or the local deli, urban retailers could feel the pinch. If this is offset by a resurgence in the use of local office space, local high streets will benefit.
With home workers spending almost all their waking hours at home, their interest in home improvements is likely to increase. Seeing their homes on Zoom has prompted redecoration and accessory shopping to make sure backgrounds reflects their desired image. If they are going to spend most of their time at home, expect people to upgrade their furniture and personal electronics, replace their kitchens, and build extensions – including perhaps a larger home office.
Homes with a separate home office or study will become more desirable and many homes will be looking for enough space for two people to work from home. They will want office furnishings to be functional but also to fit in with their home aesthetic – expect furniture ranges to offer wider ranges of desks and storage with options to conceal ugly printers, stationery supplies and desktops.
For those with enough space at home, garden home offices or shedworking is on the rise. The UK was already predicting 12% growth in domestic garden building pre Covid-19.
In the 2nd part of our working from home blog series, we explore the impact large-scale homeworking will have on other sectors, including fashion, technology and travel.
This is the third part in Oban’s three-part blog series on working from home. Click here to read the second part, which explores the knock-on effect on other categories. Click here to read the third part, which explores how working from home varies around the world. To find out how an international growth agency like Oban can help you navigate the new normal, please get in touch.
Sarah Jennings | CEO
Oban International is the digital marketing agency specialising in international expansion. Our LIME (Local In-Market Expert) Network provides up to date cultural input and insights from over 80 markets around the world, helping clients realise the best marketing opportunities and avoid the costliest mistakes. Â Â
