Global Companies To Reinvent The Office For Life Beyond Covid-19

By Soko Directory Team / Published May 3, 2021 | 12:11 pm




KEY POINTS

The need to improve office amenities or adjust workplace strategies will see up to one in four firms relocate their corporate headquarters after the pandemic.




International businesses are looking to their workplaces to revitalize corporate brand and culture after the pandemic, which will see significantly improved amenities and services available for employees, according to the latest research from Knight Frank.

Knight Frank’s second edition of its (Y)OUR SPACE report draws on responses from almost 400 international businesses with a combined headcount in excess of 10 million, providing a unique insight into the workplace strategies and real estate needs of global companies.

As firms begin to look beyond the pandemic, with vaccine rollouts providing a roadmap to measures being eased around the world, they are evaluating the experience of the past year and how to enhance their workplaces for the future.

Offices remain essential to corporate culture

Despite over a year of restricted access to offices, businesses continue to identify their workplaces as an essential component of their corporate identity and vital for retaining and reinvigorating employees post-pandemic.

90% of global occupiers surveyed by Knight Frank said that real estate is a strategic device for their business. 49% of firms named ‘corporate brand and image’ as the top strategic priority fulfilled by their real estate, while offices are also increasingly seen as a tool for improving employee wellbeing, collaboration, and talent attraction and retention, with each of these categories referenced by 37% of firms.

The need to improve office amenities or adjust workplace strategies will see up to one in four firms relocate their corporate headquarters after the pandemic.

38% of firms said it is either likely, very likely, or definite that they will relocate their corporate headquarters (HQ) within the next three years, setting the scene for significant activity in the office market and competition for the highest quality and best-located space in the coming years.

There will be a flight to quality space, with 92% of firms planning to increase or retain the same level of quality in their offices.

Many businesses are also planning to increase their use of offices to support their growth ambitions beyond the pandemic, with 30% of firms looking to increase their total office space within the next three years. In total, 65% of firms plan to grow or stabilize their current level of space.

Tech firms are set to be the biggest drivers of demand for office space, with 39% of the global occupiers anticipating an increase in the size of their global footprint over the next three years identifying as Technology, Media & Telecommunications (TMT) businesses.

Tellingly, of those, 70% are planning to increase their global footprint by more than 10% of their existing size.

William Beardmore-Gray, Global Head of Occupier Services and Commercial Agency at Knight Frank, comments: “There is a mood of change in the air. Global firms are looking beyond the pandemic and are focused on how their workplaces can enhance corporate culture and re-engage employees in a new age of agile working. We are seeing a re-familiarisation with the office beginning in many big cities around the world. Firms want to give employees the best of both worlds, allowing them to work flexibly, but making their offices the best possible experience, which means delivering higher quality and more engaging workplaces.”

New amenities and better service are top real estate demands

Firms will embrace a new era of agile working by enhancing their corporate offices, not abandoning them. Over the next three years, 47% of firms will seek to improve the quality of the space they occupy, with 46% looking to improve the amenities available to employees within the workplace. 55% of respondents said they will create more collaborative spaces within their offices and 54% said they will implement desk-sharing or ‘hot desking’ over the same period, despite Covid-19 having largely prevented desk-sharing over the past year.

Of the amenities, occupiers will look to bring to their workplaces post-pandemic, dedicated mental health facilities and click and collect services have risen into the top five priorities, whilst amenities supporting wellbeing dominate the list:

  1. On-site food and beverage (65%)
  2. Gym facilities (47%)
  3. Cycle storage (46%)
  4. Mental health facilities, such as sanctuary spaces (45%)
  5. Click and collect facilities (45%)

Occupiers’ biggest frustrations with their landlords are a lack of flexibility (29%) and a lack of innovation in product or service offering (21%), highlighting the need for landlords to invest in operations, property management, and tenant services.

Encouragingly, 60% of respondents said they had seen an increase or significant increase in communication with their landlord over the course of the pandemic, providing an opportunity for landlords and tenants to develop a more collaborative and partnership-orientated relationship for the long term.

William Beardmore-Gray added: “Half of all firms are already planning to reconfigure their real estate portfolios and remodel their workplaces over the next three years to ensure they are providing employees, colleagues, and potential new talent with the best spaces to work, learn and thrive. Businesses will gravitate towards offices that offer a more dynamic work environment and experience, utilize technology and reduce environmental impact.”

Dr. Lee Elliott, Head of Global Occupier Research at Knight Frank, comments: “The experience of the past year has focused minds on what offices deliver for firms, and what employees most value in the workplace. Real estate is increasingly seen as a strategic tool for meeting corporate objectives, from brand identity and talent attraction to employee wellbeing and achieving Net Zero Carbon or wider sustainability targets.”

Anthony Havelock, Head of Agency, Knight Frank Kenya comments that: “the latest (Y)OUR SPACE findings are truly transformational for the future of the office and highly relevant for both the Nairobi and wider Africa office market with significant implications.

With our existing office market witnessing falling rental levels and declining occupancy rates due to poor quality buildings and oversupply, landlords and developers must react to the very clear feedback that global occupiers have stated in their responses to our survey.

Occupiers will be seeking well-designed offices which can boost productivity, creativity, and a firm’s ability to attract and onboard talent plus drive the corporate identity agenda. Furthermore, there is an undoubted need across the continent to start taking the other factors of safety, sustainability, and amenities, which have been severely lacking to date, more seriously.”





About Soko Directory Team

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system.Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

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