With 2021 around the corner, many of us are busy making plans for the new year ahead. If you’re a commercial landlord or property investor, this will likely include planning your next strategic moves – from new property ventures to deciding what changes to implement to your current office space portfolio.
Additionally, if you’re a commercial property occupier, you could be in a similar position as a tenant. After all, 2020 has caused considerable changes in your requirements, so 2021 may require a total change in direction when it comes to your office.
Therefore, in this blog post, we will explore what offices will look like in 2021, covering:
- What impacts 2020 has had on office space into 2021
- The essential characteristics needed for commercial spaces to thrive in the ‘new normal’ or post-pandemic world
- How you can adapt as a commercial landlord or property investor
- The criteria for tenants to search for in 2021
What does a difficult business climate & recession mean for office space?
Admittedly, businesses are facing extraordinary challenges right now, and although we hesitate to repeat the overused word ‘unprecedented’, there is no other way to describe 2020.
It’s true that in the short-term, this will have an impact on office demand. However, in the long-term, we have significant insight that suggests that office space is necessary and will continue to be essential for both a ‘new normal’ or post-pandemic world – which we will discuss in greater detail during this blog post.
4 key characteristics of office space in 2021
1. Flexible ‘elastic’ workspaces
With more people working from home, it’s natural to assume that smaller office space is needed to accommodate a smaller future workforce being in place.
Even if a smaller footprint is the case in 2021, it will likely demand a higher-quality space. Moving away from segregated spaces (this is a meeting room; this is your individual workspace) we are likely to see offices become multi-functional spaces.
The reason behind this? Well, despite WFH (working from home) having clear benefits for many employees, there are often many downsides too. Therefore, during the pandemic, we have seen a reignition of an office’s positive attributes. This has highlighted the crucial reasons employees need this space to be productive, motivated and profitable for the employer.
In summary, if office space does become smaller, it won’t necessarily become ‘cheaper’. Instead, it will transform into a high-quality space, which represents a higher value per square foot. Therefore, this is an important consideration for both investors and tenants.
2. A new office design
Going hand in hand with the above, office design will be vital. In the majority of cases, employees will recognise the social and collaborative benefits of the office – and therefore, an emphasis on this will make an office space more appealing.
Furthermore, with many businesses forced to ‘test’ remote working over the pandemic and seeing positive results from it, it may now become a future staple of their standard working practices – giving employees more freedom, flexibility and a better work-life balance.
For larger businesses, with multiple branches, office design will be vital in minimising the ‘them and us’ culture between separate offices. By harnessing conference rooms with technology features, business occupiers can maximise continuity and minimise any cultural differences. Commercial property investors and portfolio owners who opt for this stand to make their property more competitive, attractive and therefore profitable in terms of rental income potential.
3. Smart office building
Building on the previous point, technology-centric offices will be key to minimising the transition period of remote working to full-time office work. Potential tenants will be seeking out easy ways to manage the ‘unknown’ of 2021 while the pandemic remains – and a commercial landlord can stand to profit from this by ensuring an office is equipped with the latest in remote-working supportive technology.
As mentioned before, working from home does stand to be a long-term change for many businesses. Essentially the pandemic has accelerated these plans and forced business owners to trial these practices and it may be that now employers are looking to implement a hybrid workforce as a part of their long-term business plans.
That said, a hybrid workforce has not become an automatic success and managers and senior employees will need processes – and technology – in place to nurture staff in a trusting way that supports healthy employee relationships. Naturally, this will be down to an individual company’s culture, but having an office that maximises technology to promote an almost-seamless remote working practice will be hugely beneficial.
Overall, a commercial landlord offering a smart office building will facilitate both a positive remote working and on-site working culture for the tenant.
4. Commuting links & location
The lack of commuting has been one of the most quoted benefits of working from home. It is also one of the most common concerns when considering a re-entry into the office – particularly for those businesses centrally located in busy city centres and highly dependent on public transport.
With many cities pushing the benefits of walking and cycling, we must recognise the practicalities of UK weather and winter making this implausible at times. Therefore, in the long-term, business owners may consider both the location and available commuting links to minimise the commuting friction for employees.
The likelihood is that urban centres will regain their prominence due to their amenities and commuting links. However, it’s become clear that many businesses are now searching for office space in suburban areas too. The below model shows how a business’ infrastructure may look in the future.
How can you adapt your portfolio as a commercial landlord or property investor?
The key to success will lie in recognising not only the economic effects the pandemic has had on potential tenants but also the social and cultural impacts. From enhancing facilities for collaboration and social use to maximising technology potential for ‘virtual working’, these new social and cultural working demands will be key to providing a ‘high-quality’ space that demands a higher value per square foot.
What must tenants look for in office space?
The above points are likely to fall in line with what your employees want – and need – in the post-pandemic world. Above all, your space needs to remain flexible and support transition or even support ongoing hybrid working. You will also likely be more successful at boosting productivity and motivation by providing more social and collaborative spaces to your office.
What’s the key takeaway for office space in 2021?
However long the pandemic persists, we are confident that in the long-term, the office will remain a fundamental part of our corporate culture – and will play an essential role in a business’ productivity and profitability. This ensures that office space will continue to be central to many property investors’ portfolios.
All in all, office space requirements will continue to evolve. The office is far from over. In fact, as a result of the pandemic, it has allowed occupiers to re-establish what they need for a healthy and productive workforce. Despite all the hardship, this is undoubtedly a positive move that will enable landlords to provide a better and higher quality service that maximises a tenant’s potential to do business.
Get expert advice on your next commercial property move
We hope this blog post has helped you understand what you need to prioritise when it comes to office commercial property decisions in 2021. However, we know that you’ll still have questions – and seeking advice on your individual circumstances is key to your success.