Remote work may have been forced upon companies and employees in response to the COVID-19 pandemic, but it will not be going anywhere anytime soon.
The future of work in a post-pandemic world looks set to be a hybrid model where employees separate their time between the office and remote working locations.
As as result, companies are looking at what to do with their existing office space, which has been laying largely empty for the past year.
For example, HSBC has announced that it will cut its office footprint by 20% this year, and 40% in the long-term because of its commitment to hybrid, flexible working — it has also turned its entire executive floor into meeting rooms and has implemented hot desking for all staff.
In addition, Lloyds Bank has announced it will be cutting its office space by 20% over the next two years, following a survey that found that 77% of employees wanted to work from home three or more days a week. The office space that is left will be redesigned and be mainly used for team, rather than solo, work.
This begs the question: what impact will this have on office real estate?
City of London gets creative with office spaces
The City of London – a square mile section in East London where the Romans settled in the 1st century AD — is the heart of the UK’s economy, and particularly the financial sector.
According to the Office of National Statistics, 1 in 57 of UK employees – and 10% of Londoners – work in the City of London – this represents around 542,000 people working for more than 24,000 companies.
The COVID-19 pandemic has had a significant negative impact on the City and its economy with the vast majority of those workers either working from home or on furlough.
Therefore, the City of London Corporation, which governs the square mile, has unveiled an action plan to facilitate growth for the area, including what to do with workspaces that are now lying empty.
City of London Corporation planning and transportation chair Alastair Moss commented: “There is no denying that the Covid-19 pandemic has changed some ways of working and accelerated some positive trends that were evident already in urban centers such as the City of London.
“The City will continue to adapt and prove resilient due to our robust fundamentals.
“We will work even more closely with the property sector to promote increasingly sustainable, flexible and adaptable buildings that people will thrive in.”
First, the Corporation plans to support London’s creative industries by providing long-term lets to creatives for empty or under-used spaces.
There is also a plan to work with the property industry to turn empty offices into 1,500 homes by 2030. This would allow the Corporation to kill two birds with one stone since London has a severe shortage of housing – a major area of contestation in the upcoming London Mayoral election.
The Corporation will further encourage landlords to offer more flexible and adaptable office spaces that are more suited to collaborative office working, which seems set to be the future of work.
Boom for hybrid workspaces
On the subject of adapting office spaces to suit a new way of working, global workspace provider IWG has seen growing demand from companies who want to allow their staff to not only split their time between remote working and the company’s offices, but also want to provide access to a flexible workspace that is closer to their homes.
In London, for example, IWG’s so-called satellite offices in suburban areas have been particularly popular with businesses.
As a result, IWG is very optimistic about what the future holds for their workspaces.
On a call with analysts, CEO Mark Dixon said: “The world of work has been permanently changed by the pandemic.
“The greater flexibility demanded by enterprises and by workers has created a dynamic market backdrop for us to grow into in years to come.”
Talking to the Telegraph earlier in April, Dixon added:
“We’ve signed up more companies in the last six weeks [to] two months than we’ve signed up in our entire history, it’s a big change to hybrid working.”
One company that has taken advantage of IWG’s flexible workspaces is Standard Chartered.
Under the bank’s hybrid working model – which it started implementing at the beginning of 2021 – staff in its nine core markets, including the UK, the US, Hong Kong and China, will be able to choose between working from home, their Standard Chartered office, or in any of IWG’s 3,500 global locations.
Like Lloyds and HSBC, Standard Chartered also plans to redesign its office space to foster collaboration between individuals and teams.
In addition, earlier in April, IWG signed a deal with the UK government which will allow some civil servants will be able to work in 10 of IWG’s co-working spaces outside of London. This is linked to the government’s move to move civil service jobs outside of the UK’s capital city and subsequently help ‘level up’ other areas across the country.
Dixon told the Telegraph: “London’s going to have to rethink its whole raison d’etre.
“It’s still going to be very important. But it’s a very expensive place to work for individuals in their time and their commute and companies because London’s very expensive per square foot.”