Work from Office On the Rise: How Does this Impact You?
Going by the pace of real estate projects across India, it is evident that we will see more office spaces, co-working spaces and other such commercial spaces created. Apparently, developers will report excellent profitability for the 2023 December quarter as the real estate cycle continues to soar. High demand, falling material prices, and increasing disposable incomes could generate a double-digit revenue and profitability for the sector.
The demand for workplaces has been increasing at a faster pace following the pandemic. The supply is, however, low. With the present-year demand exceeding 1.9 million square feet across the world, it is estimated to rise to 5.1 million in the next two years.
What numbers across the globe say
U.S.A: The demand for workspace in America is burdened by financial strain. The return-to-work dynamics are difficult. Anthony Paolone, Senior Analyst and Co-Head of U.S. Real Estate Stock Research, stated, "We are not in the "office is dead" camp, but we do believe that cash flow growth in the office sector will be constrained. Before the COVID-19 pandemic, office landlords faced issues, with the exception of those who were on a growth trajectory. The pandemic accelerated employment migration, flexibility in the workplace, and environmental effects. We believe lease economics may suffer temporarily if a facility is at the incorrect location." This indicates that more people are likely to get back to workplaces once the market stagnancy eases.
United Kingdom: Outside of London, the number of people using offices in Newcastle about doubled in the first half of 2022, compared to 2021. BNP Paribas Real Estate research showed that Newcastle city centre take-up is expected to exceed the 10-year norm. Tim Leckie, head of J.P. Morgan's European Listed Property Unit, remarked that there is virtually no available space in some areas of London. "Towards 2025, the London office sector will face a historic supply shortage, which will sustain and drive rental increases. The demand is estimated to rise to 38% by 2030."
Asia Pacific Region: Changes in Hong Kong tenants and a lack of office space will cause rents to go up and down in the Asia-Pacific region. Office space is in demand in Singapore, and tenants have returned. Downtown Singapore office REITs have 75% occupancy (CBD). Technology offices have 50% occupancy. Interestingly, India is seeing a tremendous demand for office spaces and this may put more people in their workstations.
Wait….Why are companies calling back employees?
Some CEOs and leaders believe that when employees are at their workplace, productivity increases, while others want to increase in-person collaboration. Some firms are going to great lengths to get their staff back by monitoring attendance, offering flexibility or threatening to lay off non-compliant employees.
Companies like Amazon, Disney, Citigroup, Goldman Sachs, Apple, Google, JP Morgan, Salesforce, Starbucks, Twitter, Uber, etc. are among the companies instructing employees to get back to office. Some of these have offered hybrids, while others have decided on full-blown work from the office. Most of the offices provide flexibility of work to motivate employees.
How Work From Office may impact you?
The future workplace will be technology and employee-driven. Advanced infrastructure along with flexibility and customization will be the key elements. Flexwork (meaning workplace or work hours flexibility) would lead to decentralised office administration. This pattern will make anemployee's life easy by cutting down the long hours of commute. Software Companies like TechDoQuest (TDQ) and many others have already started considering flex offices outside key business centres of big cities.
Decentralisation is rooted in staff commute issues. Commuting will significantly shape the flexible workplace industry. Globally, the office industry is going through a period of transition that is aggravated by the pandemic, legislative changes, flexible working, change in the nature of work and structural reasons.
While actual office spaces, styles of working and the demand differs between regions, one thing is clear: Many workers have returned to their offices, at least for a portion of the work-week. And, workplaces may continue to alter in their form, but may not really fade away. So, you may really have to get into a habit of working from your office during the week as this could become the usual thing in the future, again!
(Author: Alisha Fernandes is an inquisitive learner & content writer at TechDoQuest)