This article is part of the Disruptors Series, a special edition of our blog where thought leaders contribute with their industry expertise.
The great return to the office is largely back in full swing. City centers have been slowly but surely refilling after 18 months of dormancy, driven by office occupants returning to their desks, local restaurants, and shops.
Prior to joining Hines, I spent time at WeWork as SVP, Enterprise and Workplace, and before this, I was at Cisco for 20 years. Throughout this time, we’ve seen a real evolution in technology and its impact on the workplace. At Cisco, I was fortunate enough to work with some of the most talented teams in the industry who were determined to stay at the cutting edge of technological innovation to drive operational excellence with a sharp focus on seeing the world through the lens of its customers. Today, I still sit on the board of several PropTech businesses alongside my responsibilities at Hines.
In each of these roles, I witnessed the genesis of important trends which have since been highlighted, and in some cases accelerated, by the global pandemic. For example, the revolution of property management through the implementation of big data, the shift from the office as an asset to the office as a service, hybrid working, and the importance of technology defragmentation across a workplace.
As we emerge from the pandemic, occupiers and investors in the office market are looking for high-quality office space which caters to the demands of the post-Covid customer. In other words, there is a flight to quality, which is common after all market downturns. Places that offer the best amenities, technology, ESG credentials, and user experience will enjoy low vacancy rates and much higher demand than their counterparts who don’t provide such features.
At Hines, we continue to see first-hand that investors and customers alike, are driven by financial performance alongside embracing the highest standards of ESG criteria. Both are fundamentally important and technology underpins both facets.
Moving forward, flexibility, experience, world-class amenities and location are going to be increasingly important factors for customers. These elements were in force pre-C-19 but they will play an even more pivotal role in the modern-day workplace given the need for customers to be connected, drive collaboration and push the boundaries of creativity. In essence, the workplace has become a hub for experience, much like the hospitality sector, and technology is aiding such a drive.
Another trend that is spreading across the office market is de-densification. In other words, for the modern-day customer long gone are the days of rows of linear desks with a lack of collaborative space. Instead, we continue to see demand for open-plan offices, with plenty of floor space, natural light, great amenities on-site, and fewer desks but far more space for activities based on interaction.
For some customers, this is the 70/30 equation. Typically, the ‘old’ ratio was 70% desks vs 30% collaborative space on any given floorplate. Now some of the world’s largest brands, and some of the world’s most forward-thinking customers are flipping this trend on its head. The rise of 70% collaborative space vs just 30% desk space. The expectation is this trend will continue to take hold over the coming years to cater to the needs of the modern, and future, day customer.
This is, in part, driven by the increased flexibility of our work schedules; employees are no longer generally bound to spend five days per week in the office. When they do come in, the office needs to be a desirable destination in which to work, drawing out the best parts of working life to maximize interaction and comfort. The office is now, like never before, grounds for competition between firms seeking to attract and retain the highest caliber of talent, the new generation of which has strong views about how the office should look and feel, including the importance of ESG.
The consensus among the new generation of workers is that offices must be more inviting and more sustainable. Endless banks of desks can be replaced with some soft seating and standing desks, promoting collegiality and wellbeing. Having fewer desks increases the space available to each employee, improving air quality, comfort and providing space for more green areas. With broadly lower employee occupancy and de-densification also comes the opportunity to install more communal space in offices. Increasingly, this is an outdoor space that harnesses the proven mental health benefits of fresh air and access to nature.
Smart technology can accompany this de-densification, ensuring social and environmental goals are realized. Alongside landlords, customers are increasingly installing smart building technology to monitor energy consumption and wastage as well as air quality. Minute-by-minute monitoring and data analysis allow for short and sharp revisions to office layout and airflow, for example, which can drastically improve a building’s carbon credentials.
Through technology, data, and smart design, office providers can offer customers a new generation of workspace which meets the challenges of the post-pandemic era. Greener, more inviting offices are the future, their appeal heightened and accelerated by the experiences of the last 18 months.
Achieving and maintaining these spaces is contingent on giving workers flexible breathing room, literally and metaphorically, through less dense workspaces with fewer desks, more room for collaboration, and access to green space and sustainable amenities. Smart building tech can facilitate this, allowing for minute-by-minute monitoring of sustainability metrics and the agile repositioning of assets in line with the results.
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