Remote and home working is estimated to have increased by 25% in the UK over the last decade.

There is no doubt that gradual growth will now have been turbo-charged by the Coronavirus outbreak.

The vast collective commute into cities across the UK has been replaced by armies of home workers, who have substituted the water cooler, office gossip and post-work drinks with time with their family, the occasional stretch to the garden (to achieve those recommended 250 steps per hour), virtual team meetings and socials, and the ongoing battle as to who gets the spot with the best WiFi reception.

The drastic and unprecedented steps that the country has had to take as a result of the Covid-19 outbreak are likely to lead to a number of permanent changes in how we live our lives. But will this extend to permanent changes to the environment in which we work?

I expect most office owners are probably focussed principally on the short term.  They will be glad they own an office rather than a restaurant, hotel or (non-food) shop – these sectors have borne the brunt of the shutdown and landlords of those properties have faced missed rent, requests for rental holidays, CVAs and the likelihood of worse to come. Meanwhile, the industrial sector has probably been the least affected – with logistics becoming even more important in the lockdown.

Office landlords are likely to have seen requests for monthly rents, and possible rental holidays from businesses that are not able to use their offices, and a push to cut unnecessary service charge expenditure.  However, most will regard the problem as being a short term issue, and we should be back to normal by the school summer holidays.

Many of these office properties are a part of your pension fund – and whether you have enjoyed the working from home experience, what happens over the medium to long term for these landlords will affect a great number of people.

We could be seeing a seismic shift in the way business works. I predict we will see far less business travel – given it is so easy to Zoom/Skype, will we really want to go back to tedious airport security, train delays or long car journeys that are ultimately unproductive? It’s much more likely we will see even more money invested in technology to ensure that these online meetings are secure and resilient.  We will also finally realise that we don’t need as much paper as we used to think we did.

But what about our offices – do we really need an expensive base in city centres?

It seems clear to me there is a role for the office going forward – even if many more of us are working from home more of the time. Would the relative success we have seen in transitioning to remote working have been possible without already-established relationships and team spirit forged in the office environment? There are industries that would lose so much productivity from a large-scale shift to home working that it is not cost effective to have a remote workforce. There are also creative industries which rely on collaboration and team working in the same physical environment that Skype and Zoom just cannot recreate.

However, there are many more conventional businesses that account for a large amount of office occupation in our city centres that will be looking at what is a significant property cost (rent, rates, service charge, etc.), and seeing an obvious potential saving in the future. That saving might not be achievable for many years depending upon the length of leases they are committed to. However, for those with more imminent lease events (whether break options or lease expiries), there will be some interesting decisions to be taken as to how much space is really required in the future.

These businesses are currently operating with virtually zero usage of their offices, and so the starting point is not so much the 20,000 sq.ft. they currently lease for their 250 employees but, rather, the (virtually) zero space usage they are collectively working from currently.  Might half that space suffice with more agile working? At the very least, the ground is shifting to such an extent that, even if they do want to continue with all the space they currently occupy, it will be for a far shorter period, with rights to get out of the lease in short order.

There is a strong counter-argument that the whole home working experiment has underlined why we need offices. For those of us juggling Skype/Zoom calls and complex drafting while kids have been forced to home-school, they may get misty-eyed recalling the halcyon days when they could go into the office and work in (relative) peace.

There will be many – particularly in a younger generation – who have not enjoyed the enforced social distancing and suspension of their social life, who want to get back to the hubbub and relationships they enjoy in an office. There will also be as many who miss the chatter at the water cooler (and will no longer complain about the life/work balance) as there are those who have embraced the flexibility and fulfilling opportunities to work from their own house.

If we are seeing a paradigm shift in where we work, what will happen to the buildings in the central business areas of our cities that may fall redundant?

If the winner of the debate wants to shift away from offices, there will be a drive to make up for that loss of social connection that offices provide.  I wonder if office buildings will then be converted to a more socially interconnected form of housing such as PRS/BtR – with younger adults renting and owning accommodation within buildings that have shared living areas and greater amenities for use of occupiers.

Will that be the future for our city centres? Or will we see tenants using more space and, rather than cramming in employees, with social distancing becoming more permanent needing to offer more room?  Time will tell, but it may be well be the end of the office as we’ve known it.

Note: This article was first published in The Scotsman, Monday, 11th May 2020.

Related News, Insights & Events