June 5, 2020
Widespread remote work will probably not be the answer to the question "what future for office real estate?", but the current crisis nevertheless forces us to revisit the organization of work, offices, and housing. This perspective, part of our "Post-Crisis World" theme, is developed in the following text by Jean-Baptiste Pracca, founder of Mata Capital.
The situation we are currently experiencing is unprecedented and global. We are all affected by it. What will be the outcome? How will we recover? No one can predict it today, just as no one anticipated this situation. One thing is certain: this crisis is disrupting our personal and professional lives, thereby creating interconnections between them.
Since the implementation of lockdown, the rise of remote work, which has proven its effectiveness, should lead to a deep reflection on the organization of our working conditions. The office as we know it today will indeed have to evolve in the coming years to offer more flexibility. This adaptability will meet the needs of both companies and employees, the latter being keen to preserve or improve their work-life balance. This is also aimed at sometimes avoiding long hours spent in public transport. Moreover, in these new spaces, areas conducive to collaboration will be favored. Because, and this is one of the key lessons from this crisis, even if we are all confined to our homes, we have managed to maintain closeness with our families, friends, and colleagues thanks to the many telecommunication tools at our disposal.
Office spaces redesigned to foster collaboration
Our approach to work organization has constantly evolved in recent years. From "traditional" closed offices to "open spaces," through the recent creation of coworking spaces, and the implementation of "flex office" and remote work: we are witnessing a real revolution in how we interact at work. There is no longer a single workspace, but multiple environments. And this is precisely what most young talents are looking for, much more inclined to join a company offering this flexibility and adaptability. More attached to a work environment than to a personal office, the current crisis we are experiencing should accelerate the emergence of this new trend and this agility in professional practices. While many management teams were questioning and still had some concerns about implementing remote work, it is clear that not only does this work model function flawlessly, but also that employee productivity, efficiency, and well-being are improved. This observation will certainly lead to new reflections on work organization within companies as soon as the lockdown ends.
However, this new situation does not signal the death of office real estate. Because, and what we are currently experiencing underscores this well, we will always need to meet and interact. Indeed, nothing can replace human contact. The challenge today is more about rethinking and designing the office, no longer solely as a space dedicated to work, but as a place fostering encounters, communication, and creation. It will therefore be necessary to conduct a thorough reflection on the design and layout of premises to offer employees spaces conducive to work meetings or isolation. Welcoming and ergonomic, these new spaces will thus allow for better information transmission among employees and contribute to creating more sociability, much like the cafeteria or coffee machine which fosters both more informal contacts and a better transmission of company culture.
Significant impacts on the office and residential real estate markets
In such a context, a significant reduction in dedicated office space is not to be anticipated. Avenues for reflection on reducing costs related to accommodating employees will focus particularly on the location and placement of offices. For example, in Ile-de-France, it is highly probable that many companies, having experienced some economic difficulties, will engage in a strategy of reducing and optimizing space by seeking the lowest cost per workstation. Similarly, users will now be looking for more efficient offices to reduce real estate costs. In parallel, we could see a new demand for intermediate offices located between employees' homes and the main office or company headquarters. In this context, we could then witness the rise of the outer suburbs real estate market, like Massy or the Saint-Quentin-en-Yvelines hub, which benefits from efficient transport links to Paris and the inner ring and has the advantage of being located near dense residential areas.
Similarly, the acceleration of remote work and employees' adoption of collaborative tools will generate savings on travel expenses, as well as on employee productivity, with video conferencing having proven its worth today. Thus, well-served locations will continue to be favored. Likewise, the rise of remote work should also foster the development of secondary cities for both residential and local commercial real estate.
Finally, offices will, in the future, have to meet new health requirements, notably with the implementation of protective air treatment systems to make these workplaces safer with more effective access control.
Decentralization of activities, new work environments, a rise in digital tools: these are already emerging trends that, with the current crisis, are expected to accelerate significantly in the coming years.