Commercial property owners must adapt buildings to lure those who step out of the workplace
Much has been discussed about the growing international and local trend of remote working, and the impact it is having on the commercial property market.
Does this mean we could see a time when traditional workplaces are no longer needed?
Leon Breytenbach, national manager of the Rawson Property Group’s commercial division, says the simple answer to this is “no”.
Although the trend towards a remotely based workforce has initiated studies which have advocated the movement, he says one needs to carefully weigh up the pros and cons.
The studies show that working remotely improves productivity and contentment among employees and decreases company expenditure. It is these positive factors that create concern among commercial property investors and agents.
The latest South African Property Owners Association office vacancy report shows office vacancy figures have not decreased since the last report, and could continue escalating.
This is not good news for the investor who owns multiple office buildings, Breytenbach says.
Another point to consider is that not all remotely based employees operate from home.
“Many opt for shared or co-working spaces, coffee shops or restaurants. It seems remotely based employees frequently suffer from cabin fever when confined to their homes, seldom interacting with others.”
“For the price of a cup of coffee they have access to free wi-fi while being part of the passing scene,” says Breytenbach.
Existing and potential investors should therefore view this trend in a serious light.
Existing commercial property investment portfolios and anticipated investments require careful examination to gauge their spatial flexibility, while commercial property investors should review their portfolios by evaluating each investment for its compatibility with the shared workspace concept, he says.
“The fastest growing sector in the co-working market is made up of large corporates, many of which prefer short-term leases with flexible provisions. A growing number will not consider leasing premises unless the building also offers flexible extra space,” Breytenbach says.
Properties must be designed to cater for trending office layout demands, or minor alterations can be done to prevent them from becoming obsolete.
It has also become the norm for commercial tenants to favour premises where additional short-term floor space is available.
“Property owners may find it worthwhile to redesign under-used areas of their buildings to provide such space. Small spaces can be put to use by start-up companies or freelancers as short-term rentals by the hour, day or week.”
He says short-term office space which offers access to wi-fi, phone lines, copiers and coffee, will attract business people who are in town for short periods, work-from-home people who require formal office environments for meetings, and national corporates holding seminars or training sessions for employees from all provinces.
“Tenants in medium to large commercial properties expect the owner to keep abreast of office trends, providing workspaces conducive to improving productivity,” says Breytenbach.
This, in turn, translates into greater profits.
Some employees dislike working in a traditional office, but working from home is not always an option.
Providing a flexible space within a short commute and with a professional, team-oriented environment where employees can work alongside like-minded teams, will go a long way to keep them happy and productive. Employers enjoy reduced costs because less office space is required.
Productivity will improve as contented workers are usually more engaged. A wider talent pool may also become available when location restrictions no longer apply to potential employees.
It is unlikely working from homes or coffee shops will replace the need for traditional offices in the near future, but the adverse effect of remote and shared office space on the commercial property market is “a real concern”, Breytenbach says.
It is, he says, “reassuring” that with effort and out-of-the-box thinking, “the negative can be turned into an economically rewarding positive”.
“Co-working or short-term facilities will be an asset in the design of any office building, helping to boost tenancy figures. Existing tenants will be encouraged to stay when they appreciate the financial savings which arise from flexible, short-term space.”