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What does the future hold for European offices, post-pandemic?

French real estate management company Primonial REIM has produce a new report entitled: ‘The post-COVID office in Europe: Disruption or acceleration?

Daniel While, head of research & strategy at Primonial, says the longer the pandemic lasts, the more it transforms our lives, and, in particular, the way we work. He adds: “Companies have scaled up partial or total remote-working practises and, in reaction, employers have taken another look at their real-estate policies, and employees at their lifestyles.

“Prior to the pandemic, Europe was already trending slowly towards remote-working, with an increase in the percentage of occasional remote workers from 5.8% on average in 2008 to 9.7% in 2019. Remote-working is most common in countries with a high proportion of executives, such as in Northern Europe (the Netherlands, Denmark, etc.). During the first lockdown, the percentage rose three- to five-fold, to about 40% in France, Germany, and Italy and to 30% in Spain. Keep in mind that this percentage is close to its technical maximum, as an estimated 37% of jobs could be done remotely on a permanent basis. The percentage is far greater, of course, in sectors such as finance, IT, communication and advisory.”

The most obvious advantage for companies in switching to total or partial remote-working is savings on rent. In France, for example, rent is equivalent to 8-9% of a companies’ added value and is trending upward (it was below 7% before 2008). While says that the most obvious risk is lost employee productivity, caused by a rupture in the link with the employer brand, including less of a sense of belonging, less circulation of information, greater management obstacles, etc. The trap for companies is obvious – short-term savings in exchange for a long-term decline in productivity.

Flexibility of uses: serviced offices and hybridisation
With increasing qualified staff, more women employees, the rise of individualism, shorter work times, and so on, demand has emerged in the areas of structuring of living time and reconciling the work-life balance. This is especially the case with knowledge workers in cities with long commuting times. Hence, the development of personal services (dry-cleaning, massages, etc.) that can be consumed without taking away from work time.

Assuming that a building is designed as a network of services, there is nothing, apart from technical legal constraints, to keep it from offering multi-purpose services – i.e., a hybridisation of functions. An office, for example, could have a restaurant that is open to the public. Working space in the offices could be interchangeable. The same office might have a co-working space to host a community of entrepreneurs or freelancers. Modern offices can actually be designed as activity centres, and even as spaces operating by day as offices and in the evening or on the weekend for other activities, like an art gallery for example.

Workstation flexibility
Workstation flexibility comes down to the issue of employee mobility, i.e., the path between office, home-office and third places. Proper management of this “employee path” can achieve objectives of space optimisation, team-building, and well-being at work better than an all-remote-working model.

While adds: “Based on trends in practises over the past 10 years and the general rethinking brought on by the pandemic, it is safe to assume that greater efforts will be made to optimise use of office space as part of an effort to control employee flows. This is not the time to be thinking of long-term solutions, as it is not yet known how long social distancing measures will last. This is why the rental market is moving so slowly now.

“But going forward, two “ideal” models emerge – first is a move towards reducing space (fewer sqm). The company develops remote-working, reduces its square meterage per workstation (but not necessarily its total square meterage), and reconfigures the office as a space for maintaining a certain amount of togetherness.

“Second is a move towards office work (more flexible sqm). The company keeps its existing space while redistributing it smartly: this is the flex-office adjusted for new health and technological innovation protocols.

“There are other solutions that fall between these two models. Ultimately, it is companies’ specific needs that will decide. A small company, for example, may prefer a packaged real estate solution for its flexibility. We can also see that each of these models opens the door to the use of third places. Third places can be dedicated co-working spaces or vacant space on campuses. In any case, it is too early to say whether this enhanced flexibility in space will increase or decrease take-up. Regardless of the impact of the economic recession and social distancing, it is not yet clear whether the alternatives of “fewer workstations but more services” or “fewer workstations at the office but more third places” will result in weaker overall demand for office space.”

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