The global pandemic is already shaping the real estate world. While the focus to date has been on testing, healthcare, and transport infrastructure, businesses cannot ignore the fact that generations of people are being influenced by the convenience of remote working. That looks likely to change the City landscape of the future.
In November 2019, we launched our Work in Progress report – a generational study of more than 2000 working people in the UK, addressing generational priorities in the workplace; from technology and connectivity, to remote working and future mobility. COVID-19 and the social distancing guidance implemented in many countries has accelerated what were then just emerging trends shown in our 2019 survey data.
Pre-COVID-19, all organisations had become used to facing challenges from disruptors in technology and generational shifts. Real estate’s relationship with technology had already influenced sustainability, market position and brand. This pandemic has shifted the landscape such that the sector is now defined by it almost entirely.
Over the last ten years, we've seen more activity in commercial developments built purposely as flexible working spaces. There's been a huge increase in investment in the hotel and leisure industries as they respond to the demand for PropTech from guests. And we continue to see global brands create innovative work spaces, with vast campuses built to provide lifestyle experiences and benefits for their employees all in one place.
Our survey data showed the main risks in these areas; the impact on businesses; and decisions for professionals, owners and investors to consider and ensure future growth.
44% of UK workers aged between 16 and 55 said that having up to date hardware and software was important to them. Today? It's right to assume that this statistic has increased dramatically with the majority of the UK workforce working from home. This 'commercial at-home' need and demand was reflected in the response from Netflix and others reducing their streaming traffic to ensure the strain on internet service was reduced, with so many people using Wi-Fi away from the workplace.
What does this mean for you?
It is essential for business continuity and future security to have the appropriate technology and infrastructure capable of enabling people to work remotely. In some cases this carries significant privacy issues to be considered.
Where we've previously seen the majority of investments in tech set into the fabric of buildings, there will now need to be a rapid shift to ensure homes are adapted for your people and the business. Perhaps the majority of investment in tech for your business will be in 'the transferable assets', rather than in the building itself
Supporting flexibility alongside productivity
While the Government has announced that the UK is past the peak of the pandemic, the date of lockdown is still under review. Many businesses and workers are keen to get back to work and a sense of normality. However, we all know that getting back to work doesn't necessarily mean returning to the office, and we have to balance this with a new norm that's still visionary, and not fully formed.
In our study, nearly half (48%) of all UK workers also said that the ability to work flexible hours was important to them. Now, we're facing the challenge of planning for how this can be implemented sustainably to retain both your workforce and productivity.
For commercial properties employing on-site staff, proptech has increasingly been used by employers to monitor the efficiency of employees.
There have always been risks to this. Staff monitoring has to be limited, targeted, time bound and proportionate. Employees must be told clearly in advance, and when such data might be used. Employers must also consider whether their employees have an expectation of privacy (such as private emails). But how can you protect productivity levels when these measures either can't be implemented for privacy reasons in the home, and monitoring relies on connectivity that belongs to the workers you're monitoring? The challenge and risk becomes even greater when you consider that this evidence is often relied upon in tribunals (for example from CCTV or desk occupancy sensors).
Keeping your assets relevant
A successful business still needs purpose. So how can the centralised office compete with the experience of another workspace that has the bespoke environment to suit every individual's preferred needs – by merging with the life space, it's created something unique in comfort and convenience. With more time spent at home, efficient and technology-enabled spaces will have a competitive edge for commercial developers and landlords.
This has a huge impact on rents and long term tenancy agreements for some of the most expensive real estate. The Coronavirus Act 2020 will alleviate some of the pressure in the long term, but only until the end of June unless this is extended further with the lockdown and other state aid investments like furlough and the Government's new Future Fund.
Ultimately, your assets need to remain relevant. The demand and future advantage of providing benefits like on site GP services, air purifying as well as climate control systems, and touch free access could be the key.
In the same way we have seen buildings in Asia and the Americas adapted to limit the risk from earthquakes and flooding, the latest innovations in tech and life sciences could be used to make our buildings sustainable and our workforce safe for the benefit of economic, environmental, and social well-being.
Our Work in Progress report is a research-based study of more than 2000 working people in the UK and Germany aged between 16 and 55. First launched in November 2019, the report addresses generational priorities in the workplace and outlines the latest trends emerging from our data that will impact businesses.
Al Watson and Paul Lawrence | Partners
This is a challenging time for every business; our team is on hand to help you through any of the issues raised in this article.
