Earlier this week, Barclays boss Jes Staley admitted that the banking giant will be looking closely at how it uses its global office space, given the recent widespread shift to remote working. Perhaps his most telling quote: “The notion of putting 7,000 people in the building may be a thing of the past.”
In a previous blog, we discussed some of the immediate impacts of the coronavirus pandemic on office workspace, and also considered some of the longer-term trends that might emerge. It’ll be no surprise that we suggested a potential rethink when it comes to the future use of central, large-scale corporate offices – but such a statement from the leader of a major, international organisation hints at that potential becoming a reality sooner rather than later. But, while it seems certain there’ll be change, what does that actually mean and what will be the wider impact?
Space as the new frontier
Across all types of real estate, particularly for businesses occupying large office portfolios, there’s going to be a huge focus on the utilisation of space. This will come to the fore in two main areas – how occupancy can be optimised to better control and even reduce costs, and the best possible allocation of space for health and safety purposes. But, let’s be clear, we’re talking about the possibility of more than just a few tweaks around the edges. There could be some seriously significant shifts here, driven by open, innovative and out-of-the-box thinking as to how office space is occupied – or redeployed entirely. In the last couple of months, we’ve seen that it’s possible for various organisations – even large multinationals like Barclays – to run at something close to usual capacity and output despite their teams being at home. Now that method has been somewhat ‘proved’, and given that COVID-19 will continue to impact all of our lives for some time to come, having teams spread across various locations (whether smaller offices or even their homes) with remote-working capabilities may well become a new normal.
A geographic rebalance
For the purposes of this blog, let’s accept the premise and say that there is going to be a wholesale move by companies away from huge office complexes with thousands of employees in one place, to a setup that is much more dispersed. That would have deep social and cultural implications, fundamentally altering the makeup of our communities – particularly in large cities. Struggles in the retail sector have drastically altered the landscape of those urban centres in recent times anyway; if offices also move out of those areas then the effects could be seismic.
But, it’s by no means all doom and gloom, because where there’s change, there’s opportunity. Here at MRI, our own research has demonstrated a widely held view in the industry that empty retail space could be transitioned to residential – could it be the same case for offices? And what of large office campuses on the outskirts? Were organisations to move away from these locations, could they be turned into facilities for last-mile services and logistics, perhaps? There’s also an impact on the residential sector to consider – because if more people are going to work from home more often it will undoubtedly affect where they want to live and will almost certainly change their priorities in terms of what they want from their homes and the amenities nearby. In smaller pockets these are not completely new trends, but we haven’t yet seen them emerge industry wide. If we take Barclay’s thinking as a barometer, then we could be on that precipice.
Collaboration (and technology!) will be key
Another question – and an important one – what will landlords do? If the way businesses occupy office space changes then those that own, operate and invest in it will need to consider their approach. This is where ‘opportunity’ is the optimum word. Landlords that are flexible, those that are willing to listen to the needs of their tenants and work with them to provide space that meets their needs, will have the best chance of maximising occupancy – and therefore revenue. Those that don’t, won’t. Not a ground-breaking realisation, but one that will definitely be heightened in the changing and challenging environment. Where today’s organisations have an advantage that previous generations didn’t when navigating such deep-seated change is in their use of technology. Digital innovations for space planning, online forms of communication and the power of software to process and interrogate huge swathes of data should, if harnessed correctly, make for better-informed and smarter decision-making than has ever been possible before. To achieve a truly collaborative approach, and to effectively manage the sorts of strategic decisions that both landlords and tenants may choose to make or be forced into, then technology will be a non-negotiable option.