A new report on the future of the office by the Urban Land Institute (ULI) and The Instant Group has found that while offices are here to stay, the sector is in ‘a full state of flux.’
Analysis from the global survey proves that office occupiers are still trying to figure out the impact of new activity-based workplace (ABW) strategies and hybrid working patterns, leading to demands for a flexible approach from landlords who, at the same time, are trying to cope with cyclical challenges following increasing interest rates, ongoing high inflation and construction costs.
As part of the report, 285 office occupiers, landlords and third-party advisors in North America, Europe, Asia Pacific, Middle East and South America responded to a survey. In addition, in-depth interviews with leading industry experts and two roundtables were held, to shed light on changing occupier demands, the response from landlords and the impact on their business models.
While the office has a key role to play in occupiers’ workplace strategies in conveying the corporate culture, stimulating collaboration and mentoring new and younger team members, the report reveals that now only 14% of occupiers believe their existing workspace portfolios align completely with their business objectives and strategies.
According to research carried out by The Instant Group, demand for flex office space has increased by 29% globally since the pandemic, in response to these changing demands.
And in parallel, the study shows that landlords (80%) even more so than occupiers (75%) expect greater lease flexibility and agility over the next five years. There are regional and sector variations on what that flexibility should look like but most agreement exists around new lease structures that allow occupiers to grow and shrink their office footprint within a single contract.