Co-working spaces will be ‘much more threatened’
By Mariel Alison L. Aguinaldo
The office market is expected to bounce back from the effects of the coronavirus pandemic in around 18 to 24 months, said real estate services firm JLL Philippines.
In an online forum held on July 17, Janlo de los Reyes, head of research at JLL Philippines, discussed the changes that players in the office market should expect and what they can do in anticipation of these changes.
CHANGES IN THE SHORT-TERM (ONE YEAR)
Tenants will prioritize the health and well-being of their employees as the possibility of contracting the virus remains very imminent, focusing on proper sanitation in their facilities and implementation of internal health protocols. They will also shift to remote work setups or shed memberships in flexible workspaces to help bolster their cash flow.
“A lot of their current occupiers are now preferring to stay at home. Even if they do have to sacrifice, for example, internet connectivity and the collaborative work environment, at least they are able to prioritize their safety and are still able to work on what they need to do within their respective homes,” said Mr. de los Reyes.
In order to adapt to this, operators must ensure that they are adhering to health and sanitation guidelines imposed by the government. They must also consider adjusting the layout of their facilities given the changes brought about by social distancing, such as limited room capacity. According to Mr. de los Reyes, serviced offices have begun to appeal more to occupiers over flexible workspaces due to their more enclosed setups.
“We’re trying to observe physical distancing, and it’s quite difficult to manage or even control the movement and the circulation of employees within the office premises. That’s why we think that co-working spaces, which operate under a much more open and collaborative layout, will be much more threatened,” he said.
CHANGES IN THE MEDIUM-TERM (ONE TO THREE YEARS)
At this point, the priority of tenants will have shifted to business continuity and operational resilience. There may also be an increase in work mobility programs among organizations; this includes initiatives such as the splitting of bigger sites into satellite offices scattered across various locations.
“The motivation behind it is that companies will want to be located near to where their employees are. This is for them to be able to ensure that they address the shortage of public transportation,” said Mr. de los Reyes, who added that operators should stay in touch with clients and extend their help when needed.
“At the end of the day, this pandemic will be gone, whether that’s going to be in 2021 or 2022… it’s important that we make sure that we are connected within that ecosystem that we operate in so that when the market resumes or stabilizes, at least we still have those relationships ongoing and that we’ve done our part in helping them also tide over this pandemic,” he said.
CHANGES FOR THE LONG-TERM (AFTER THREE YEARS)
Practices that employees adopted formerly as a means to deal with the pandemic will eventually become a part of their work lifestyle. Health and well-being will remain a priority; remote work arrangements, provision of seats in flexible workspaces, and establishment of satellite offices will become the norm.
This emphasis on flexibility may change the way operators offer their leases. “A lot of occupiers are looking for the most flexible arrangement and the shortest lease that they can find to have that flexibility to close shop or expand their facility. This goes back to the uncertainty that we’re seeing in the market,” said Mr. de los Reyes.
He also believes that there will be an increase in demand for high-quality flexible workspaces among tenants. “A lot of the operators are going to compete in terms of how to retain or attract new demand coming in. I advise them to take a look at the overall ecosystem and analyze how to enhance that collaborative environment while maintaining that safety among their occupiers,” he said.
“The State of Real Estate, Offices, Co-working Spaces: Moving Forward to the New Normal” was an online forum organized by co-working space OpenSpace.