FINAL THOUGHTS
FACTORS FOR 2021
Slow road to reopening offices even after Covid-19
The return to physical spaces post-pandemic will be slow and gradual. As re-occupancy becomes a reality for more businesses, implementation through experimentation of workable and healthy working patterns will emerge. The capacity constraints within existing office portfolios will force companies to adopt hybrid workstyles, with a clear distinction between staff working at home or in the office. This will be a difficult balance for business leaders to strike from both an operational and managerial perspective. Nonetheless, increasingly businesses are looking beyond the crisis, recognising that businesses are immeasurably weaker without recourse to an identifiable collective hub.
DIGITAL TRANSFORMATION WILL BE A HIGH BUSINESS PRIORITY IN 2021. THE COVID-19 CRISIS HAS FURTHER EVIDENCED THE IMPORTANT ROLE THAT TECHNOLOGY HOLDS IN BOOSTING PRODUCTIVITY AND PERFORMANCE, AS WELL AS MAINTAINING CURRENT AND FUTURE SERVICE DELIVERY.
Work will be where connectivity is
Digital transformation will be a high business priority in 2021. The Covid-19 crisis has further evidenced the important role that technology holds in boosting productivity and performance, as well as maintaining current and future service delivery. Achieving business agility and resilience - an aspiration for firms before Covid-19 – enables businesses to swiftly react to the fast pace of market change and more fundamentally business survival. Moreover, digital connectivity can aid businesses in addressing wider societal issues such as cutting carbon emissions by reducing the need to commute and enabling the efficiency of buildings. Cities, districts and buildings that have made infrastructure a priority will therefore carry favour in the location choice of companies.
What about the other crisis? The Climate
Whilst Covid-19 has rightly consumed attention over the past 12 months prior to the pandemic, ESG integration remains a topic of urgent action. The environmental component was of particular focus, with real estate recognised as holding a key role in achieving sustainability targets.
The built environment accounts for 40% of total UK carbon emissions and 32% of landfill waste comes from construction and demolition of buildings, with the UK Government now proposing to raise the minimum EPC rating to B by 2030.
Covid-19 will clearly bring challenges in relation to the expected tightening of budgets. New development projects aimed at achieving zero carbon credentials for example may now question viability if lower rental growth is the result of weaker economic conditions.
Fundamentally though, occupiers are beginning to demand buildings that reflect their own ESG targets and values - attracting the next generation/war for talent. As such, firms will look to partner with landlords more collaboratively to achieve ESG targets - both at the leasing stage and throughout the course of the lease.