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The new normal: flexible office spaces

The current pandemic has shown that radical change is also sweeping through office settings. It is incumbent on property investors to work with their tenants to come up with sustainable solutions for future office spaces.

The impact of the coronavirus crisis on how much floor space companies are likely to require in future and its effects on the office property market as a whole are the subject of much discussion these days. Almost overnight, hundreds of thousands of employees were suddenly forced to work from home. The way we carry out our jobs and communicate with each other has been turned completely upside down within a very short space of time.

It is gratifying that most of us have been able to adjust to the new situation relatively quickly. Means of communication facilitating the new status quo have absolutely mushroomed. Now, we don’t think twice about conducting training sessions in the form of webinars or holding team meetings via video call.

Before the coronavirus crisis, working from home was fairly uncommon due to a number of factors, including the high standard of public transport and relatively short commuting distances. According to a study by UBS, Swiss employees have the shortest average commute in Europe, at just over 30 minutes.

Few people yet have long-term experience of working from home. Nonetheless, people are increasingly expressing criticismt. Employees feel cut off from the business community and staying in close contact co-workers is now trickier or altogether impossible. And then there’s the issue of new starters, who don’t really get to immerse themselves the company culture. Despite the new modes of communication, it is still difficult to pick up on people’s feelings, emotional nuances or the general mood over a video call, never mind actually address them. Besides, video calls simply aren’t conducive to innovation, which, like so much else, requires iterative and informal exchange. This is something that almost only ever comes from face-to-face contact; it cannot be scheduled to order. What’s more, career advancement is all the more difficult when working from home.

Working where and when you want
The Fraunhofer Institute for Industrial Engineering carried out a recent survey of almost 500 German companies. Unsurprisingly, some 93 percent of those questioned stated that they were using more online and video conferencing systems. Almost 80 percent  took the view that the demand for flexible working will continue to rise sharply among employees going forward.

As such, companies are endeavouring to step up the digitalisation of their processes and bring their businesses into line with the new needs of their employees. They are being called upon to provide more space for creative thought and to provide greater scope for people to come together and exchange ideas.

It will hardly come as a surprise to learn that the Deloitte Millennial Survey 2018 found that Generations Y and Z believe «diversity and flexibility are the key to staff loyalty.»

More space for creative thought is needed.

The demand for more space for socialising and areas for gathering together is increasing.

According to the Deloitte Millennial Survey 2018 for generations Y and Z «diversity and flexibility are the key to staff loyalty.»

New ways of working together
Claims that the upsurge in working from home will mean less need for office space fall short of the mark. Those heralding the demise of offices as we know them and predicting the dwindling of the office property market should also be viewed critically. Property developers are currently pondering the types of spaces that are likely to be in demand over the coming years.

There are all sorts of conjectures about the market: some experts reckon that the need for office space will be slashed in half, while others expect it to double. The office property market is becoming more diverse in nature due to the impact of the coronavirus and all that it entails. Companies are also in a position to reassess the average space assigned to each employee. In some cases, they may be looking to increase this significantly. At present, members of staff often sit too close together, while breakout areas and meeting rooms are few and far between. People are now looking for more space for socialising and specific areas for gathering together. At the former NZZ printing plant in Schlieren (now «JED»), employees enjoy a generous 20 m2 each as the new design for the premises incorporates meeting points such as a spacious coffee bar and a staircase with inbuilt seating.

Of course, it’s worth bearing in mind that working part-time was very common in Switzerland (60 to 90 percent of employees), even before the pandemic. We create offices for our clients based on a 0.7 concept, which means that they offer a fixed workplace for around 70 percent of the company’s employees at any given time.

The office property market is becoming more diverse in nature due to the impact of the coronavirus and all that it entails.

Even before the current crisis, companies were very mindful of the part that their culture and values play in their employer branding, which is so important in attracting highly qualified employees who are well suited to their business. Corporate culture is something that needs to be actively experienced.

Swiss Prime Site has endeavoured to build in maximum flexibility in terms of space for tenants at YOND, an office and commercial property in Zurich-Albisrieden that opened earlier this year. The high ceilings allow the occupants to grow into the space to optimal effect: mezzanine floors can be installed on 20 to 80 percent of the floor space using specially developed modular systems.

Back to the new normal
We are rapidly becoming accustomed to the coexistence and interplay between remote working and the traditional office. Both types have their place.

This represents a major opportunity for real estate developers. More than ever before, it is incumbent on us to enter into dialogue with our tenants, helping them to forge new pathways and showing them just what can be done. After all, the new normal is all about putting flexibility centre stage and embedding each company’s unique DNA into their office spaces.

This article by Karin Voigt, Head Portfolio Management, and Marcel Schaad, Head Acquisitions & Sales at Swiss Prime Site Immobilien, was published as part of the NZZ Real Estate Days 2020 in the NZZ supplement.

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