Some of the world’s biggest office occupiers are back-pedalling on plans to make remote working the norm beyond the Covid-19 pandemic, according to the president of Cushman & Wakefield.
Last year, bosses at many large companies – including financial services groups such as JP Morgan and Schroders, and tech giants including Twitter – hailed homeworking during lockdown as a success, and several suggested that large swathes or even all of their workforce could adopt it permanently.
But as vaccines are rolled out around the globe, most companies now see a hybrid model of working as a more likely long-term outcome, according to John Forrester, Cushman’s global president.
“There are a lot of companies that are rewinding that tape of comments that were made six months ago, and that are now saying there will be a hybrid model,” Forrester told EG.
“Most companies now think that at some point the vast majority of workers will come to the office a number of times a week.”
He added: “What we’re hearing from all of our big corporate occupiers globally is not a flight to homeworking for a large part of their workforce forever – absolutely not.”
Forrester was speaking after the publication of a Cushman & Wakefield survey, which suggested that post-pandemic office workers’ levels of remote working would range from around 1.5 days per week to a maximum of three days per week, with very few making the change permanently.
Rising office standards
The difference between now and before the pandemic, according to Forrester, is that occupiers are becoming pickier about their workplaces.
“The office is going to have to do more for them as an organisation – and more for staff,” he said. “Previously, occupiers were prepared to make compromises [on their offices] that they will not make going forwards.”
Those trade-offs were on issues such as local amenities, nearby parks and sustainability, he added – all things that developers are increasingly incorporating into new projects.
Forrester pointed to Argent Related’s £5bn development at Brent Cross Town, which earlier this month presented its first 550,000 sq ft of office space to the market, as a prime example of what occupiers might turn to in the future.
When the mammoth project is complete, developers hope that professionals in Brent Cross will be working in high-quality, sustainable office space with leisure spaces and restaurants nearby. They will also be surrounded by 50 acres of parks and green spaces – meaning that, unlike in most city centre developments, they will be able to see the horizon.
What about the City?
Forrester’s comments follow warnings from real estate professionals about the outlook for London after the pandemic, with the “doughnut”-like scenario of the outskirts possibly thriving while the city centre and its economy are left empty.
But the Cushman president dismissed the suggestions. “It is too easy to generalise. It takes a great deal of time to fundamentally change somewhere like London.
“Saying it is going to become a doughnut is fundamentally wrong. It is far more nuanced. Occupiers want an environment that fulfils more than just a place of work that is easy to get to.
“It helps to be part of a mixed-use environment where people can live, work and play, and it helps to be near large pools of diverse labour. But many locations in the City and the West End already fulfil those characteristics.”
Many industry experts already anticipate a split in the central London office market, in which high-quality buildings continue to command competitive rents, while less desirable sites fall by the wayside.
Forrester echoed this assessment, suggesting that the coming years would bring a reckoning not for central London as a whole, but for specific buildings and streets that did not satisfy occupiers’ rising standards.
“With some buildings in the City, for example, there is a feeling of claustrophobia, which an occupier is going to look to release their organisation from when they get the chance,” he said.
“Those are the buildings that do not have these fundamental qualities [that occupiers want]. They are the ones that will struggle, and face higher risk of obsolescence.”
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