Wybo Wijnbergen, co-founder and chief executive of infinitSpace
For as long as there have been zones of commercial property in urban areas, employees commuting to work has been a fact of life. The headaches this brings with it are well-established, both anecdotally and in the data: butting heads with the UK’s unreliable weather seasons and indeterminate public transport and road traffic infrastructure is a fact of life. For decades, this has been seen as a fair trade-off: employees can live where they want, so long as they are willing to journey to the occupation they wish to fill.
The advent of remote working brings with it the possibility to change this. Studies have demonstrated employee enjoyment of a newfound flexibility and control over their schedules. With two fifths of employees saying they never intend to return to full-time office working arrangements, there can be little doubt that the strain of commuting has played a major part in changing workers’ relationship with the office.
Of course, there is a compromise to be struck here. The Future Forum Pulse study found that bosses are three times more likely to favour a return to the office than their employees. As the dust settles following national lockdowns, it is unclear what shape the future of work will precisely take. However, there is already evidence of an evolution in the way commercial real estate will be used – and how these trends may determine future investment.
Out of office
Commercial real estate investors are rushing to pour investment into their properties. For many, this will read as a show of faith in the sector. A more cynical view would hold that the circumstances of the past two years – and the trend towards increasing flexibility over decades – have obsoleted many office buildings, and required substantial investment of their landlords to keep up with changing requirements.
Put simply, commercial real estate is having to rethink its tried and trusted formula – the question is no longer who will occupy a building, but rather for how long, on what scale, and for what.
Such an overhaul in the idea of what a commercial building can do represents an opportune moment to consider how investors can make financially sound decisions which reflect the market better – which means being more attentive to the individuals in question.
The 15-minute city
The ’15-minute city’ is a social and urban planning idea which has circulated since first being positioned by French academic Carlos Moreno – while its recent implementation in Paris has resulted in a resurgence in its popularity.
His vision is a simple one which supports a modern and evolving view of what a city can do for its residents, while challenging how they are formulated in practice. The concept suggests an environment in which an individual’s day-to-day needs are primarily accounted for within a short walk or cycle from their home. This includes anything from work to education, to grocery shopping, leisure, and healthcare.
The questions posed to each of us by protracted national lockdowns during the pandemic here find an attractive solution. While the 15-minute city was not formulated in response to the pandemic, it is understandable why the changing nature of both home and work have given rise to renewed discussion of the idea.
In truth, when talking with real estate investors, the idea may be more accurately seen as a ‘Smart city’. Here, basic human needs are accommodated within the way work and life are balanced on a structural level, rather than through the layering of more choice within a rigid system.
Evolution in the commercial sector
Out-of-date office buildings are likely to continue to incentivise commercial real estate (CRE) landlords to renovate to match up to the new requirements of the market. Many would be wise to consider not only the needs of businesses, but of their employees too. This would mean looking to create smarter workplaces, rather than more sophisticated ones.
One such solution would be to consider investing in real estate away from city-centre commercial districts, and instead opening smaller and more multi-functional spaces spread across a city. Providing individuals with ‘satellite’ spaces they can use to the level of their needs holds numerous benefits – particularly with reference to balancing the liberation from commutes with the benefits of employees working together in a shared space.
Studies have highlighted the detrimental influence commutes have on both satisfaction and productivity – which costing individuals significant time and money.
Limiting commutes holds innate environmental benefits, getting workers out of their cars and reducing traffic in local areas. In turn, councils could rework public transport to benefit their communities more broadly, rather than concentrate resources on handling two commuter rushes daily.
On the other hand, businesses could take a more flexible approach to how they use offices. Many can see the benefit of embracing remote work, at least in part. This means that the cost-efficiency of investing in an office building to be used between Monday and Friday, from 9am to 6pm decreases. Instead, smarter local hubs could tailor to specific needs. An organisation may, for instance, need a room to bring together a small team for a day. Conversely, they may require a single meeting room for only an hour. Greater flexibility benefits the business, as they can adjust their approach to balance the incentives of office work with positive agency for their teams.
There is also the prospect of bringing in smarter tech. Organisations working in a local satellite office could link together through an app, allowing more intuitive connections within the space. Members could find local suppliers and products, or networking events through a shared app interface.
While the idea of every individual’s daily needs being within the reach of a 15-minute self-powered journey may seem utopian, in fact we are at the opportune moment to consider where commercial real estate can adapt to a working landscape that newly prioritises flexibility for agile businesses and their employees.
These changes will happen anyway. It is evidently unworkable to wait and hope for a mass-scale return to the office: the tide has simply turned against it. Commercial real estate investors should, then, be proactive in identifying new opportunity areas, and think creatively about how their existing spaces can be retro-fitted for multi-functionality and flexibility. If the adaptation is made with sensitivity to the new face of work, commercial landlords will find their properties grow in parallel to the new way of doing business, rather than fighting against it.
infinitSpace is a company that enables office landlords to easily create and run a flexible office space under their brand and conditions. Prior to launching infinitSpace, Wybo was a managing director at WeWork, where he helped oversee the company’s expansion across Western Europe.