Future of Work: Let the user be your North Star

Whether it’s Deloitte going remote-first forever in the UK, or Morgan Stanley insisting, as a leaked memo seemed to confirm last week, that only fully vaccinated staff can return to its New York office, the world of work is getting a hell of a lot more complicated. And it is a world of work where decisions being implemented on one side of the globe have implications for businesses on the other. So for EG’s latest Future of Work series we brought together decision-makers from London, Toronto and Sydney to examine how and whether employees in these key markets are returning to the office, and how landlords are responding. In Australia, office occupancy has shot up from single digits last year. But it’s not been linear, nor did it happen overnight. “The experiences in Sydney and Melbourne have been extremely different,” says Jon Lesquereux, Equiem’s regional head for APAC. “In Sydney, where I’m based, life eased back into sort of a level of normality over a period of several months. But it did take quite a bit of time. Australia’s obviously managed Covid very well by world standards. As a result of that, we managed to get back to a degree of normality pretty quickly within our country. “Having said that, what we’ve not done very well is vaccinate. And so what’s happening now across Australia is we keep getting these state-by-state lockdowns. In terms of where we sit now in terms of occupancy, Sydney is sitting at about 68% occupancy assuming a 90% normality. Melbourne’s is about 45%, as it keeps going back into lockdown.” What weighed on Australians as they considered returning to work could provide lessons to other markets. “Initially, the reasons were all about health and safety,” says Lesquereux. “And then they moved on to government regulations. And then after that, it became transport concerns. And now the key driver in Australia around occupancy is actually people’s preference as to where they want to work. That’s the challenge that we’ve all got globally now.” In Canada, the experience has been very different. “Toronto has probably had one of the most restrictive lockdowns in the world for a major city,” says Melanie Chin, Hines’ brand and community manager. “Indoor restaurants have been closed for almost 400 days now, so it’s a very restrictive environment. Two weeks ago, patio dining opened up and everyone is very excited about this. “So we’re starting to see the light at the end of the tunnel. And we know what our reopening plan looks like. But everyone is very hesitant to make plans for the future because of our government and the decisions that they’re making.” And occupancy? “We’ve just come out of the stay-at-home order,” says Chin. “And so occupancy would be at a minimum.” Retail versus office London, and the UK, has more in common with Canada than Australia, of course. But it’s easy to underestimate how much activity has returned to centres of business, just not to offices. Gilbert Yule, Argent’s estate and customer lead for King’s Cross, has been surprised by the speed at which footfall has returned to the area. “In some areas like Coal Drops Yard – our retail and F&B area – we’re seeing footfall equivalent to 2019. The restaurants are very busy, and some restaurants are seeing a 143% increase on 2019 trading figures just from alfresco dining as well. King’s Cross as a public realm – where 40% of the 67 acres is open space – never closed. “But in our more office and commercial district, numbers are down. The stay-at-home order is still in place. We’re waiting for that directive to change and the order to lapse. We’re working with our businesses and speaking to them all the time. ‘Cautious followers’ is the way we like to describe them. And just because the directive changes doesn’t mean our businesses will suddenly invite everybody into their offices. They have to go through their own processes and procedures because, at the end of the day, the safety of their staff is paramount to them.” At King’s Cross, office occupancy is still in single digits and, while Yule expects that to change, not everything will. “Everybody knows that world of coming in five days a week, eight o’clock in the morning till eight o’clock at night, is hopefully something of the past,” he says. “We can work much smarter going forward.” Just as the UK had “eat out to help out”, Melbourne has been offering its residents vouchers to use in restaurants and cinemas on Fridays to bring people back to the centre of town. Sydney is following suit. But, ultimately, while it may have been governments that kept people from the office, it won’t be government that entices employees back. “Obviously, the government was the driving factor in stopping people coming to work,” says Lesquereux. “But in bringing them back? No. The biggest single thing was people’s perception of safety, getting those processes in place and getting people comfortable, particularly with using public transport – that’s been a major driver of getting people back to the office. In Sydney for a while our roads were jammed. We were back to pre-Covid traffic congestion and there was nobody on the trains and buses.” Chin agrees, pointing to Hines’s CIBC SQUARE scheme as an example of how space will play its part in stimulating demand for the office. “We’re in a unique position where we were wrapping up construction when Covid hit, and tenants haven’t been able to move in yet. There are a lot of drivers for people to come into the office so they can explore this new space. A lot of my focus right now is to help my tenants with that conversation and make sure they’re equipped with the tools to make the office space seem enticing to their employees.” Chin points to the development’s unique features as a draw. “We have a one-acre park that cantilevers over the railroad track and is the first of its kind. If you’re used to working out in your back yard, you can do that. We have flexible workspaces within the towers where you can easily transition back to regular work life without giving up some of the comfort that you’ve developed while you were at home.” Alternative workspaces Inclusion at building level and more broadly is key too. “For the city as a whole, I do know a lot of global companies that have gone permanent work from home,” says Chin. “I don’t think those employees are going to be working from home. They’re going to look to work from something like a co-working facility, because they’re just so tired of being at home. And they want a different environment, and they want connections.” Innovation – and novelty – matters at King’s Cross too. “Nobody really knows what the future’s going to bring,” says Yule. “The focus for us is on the office space, but even more so on place. We know some of our visitors are coming in because we’ve got art exhibitions, we’ve got the fountains back on. We’ve got Wimbledon on the big screen opposite the canal. It’s about the sum of everything that your place has and how you optimise that. That’s what’s going to make people stay and think: ‘It’s a lovely morning. I can do yoga beside the canal. I’ll work from the office today.’ That’s the real challenge. We have to work so much harder now as asset managers to ensure people have got more reason to come to the places that we’re creating.” A “come for the yoga, stay for the office” message is all well and good for employees but what about the practical considerations an employer has to balance? As you would expect from a business that has recently launched a SmartScore rating for buildings, WiredScore has a plan. “We have offices in New York, Paris, Frankfurt, Berlin and the UK, so we’re trying to set a company global policy,” says UK & Ireland country director Tom McClellan. “But within that we want to tinker with what we can do in London in the coming weeks and months. “We know whatever we do isn’t going to be perfect first time. So, firstly, we are consulting our workforce, to understand how they feel about returning to the office. There is going to be a really broad spectrum of responses, I’m sure, across every business. There certainly was at WiredScore. I think expectations and feelings about being in the office day-to-day have been reset entirely in the last 12 to 15 months. And the way people feel today, compared to the way people might feel a week after they’re back in the office, to a year after they’re back in the office, I think will change dramatically as well. “We’ve created a policy which is that from the day we are allowed back in, we will enter a ramp-up or a trial phase so people can come back as and how they wish. They should communicate with their team leads to understand how their different teams work. It’s about understanding how the team can best work, rather than just the individual.” Adaptability and empathy However, WiredScore is anticipating the new normal. “We’re aiming for three days in the office versus two days working from home at that point,” says McClellan. “There has to be a bedding-in phase for people to familiarise themselves. We’re trying to put in some real adaptability and empathy into the situation because people are going to feel very differently about this because of their personality, according to the kind of work they do and where they are across the world as well.” That gets to, perhaps, the one universal truth – though whether it plays out this way in practice remains to be seen. “The future is really focusing on what individuals want,” says Lesquereux. “The power is with the individual; they’ve got more choice than ever. If you don’t want to go to the office, you probably don’t need to go. If your office isn’t a very nice place to be, you’re going to find somewhere alternative to go or you’re not going to work for that company. “And that pushes a couple of things. One is a flight to quality, but the second is creating places physically and experientially that people want to be. And the fact is, if you can’t do that, they’re not going to come. It’s a fascinating thing because it goes to psychology as well as data. What do people like? Why do they come? What rings their bell?” McClellan agrees. “The most critical data points you have are the outcomes that you’re delivering to users. Have your North Star as the user, understand what they want and then work back from that. The winners in the post-Covid world in real estate will be those who latch onto that best and are prepared to update their views of what that is frequently.” This interview was recorded before Sydney was put into a two-week lockdown. Click here to watch the Future of Work production To send feedback, e-mail damian.wild@eg.co.uk or tweet @DamianWild or @EGPropertyNews