The commercial real estate landscape has been shaken up over the past 18 months, with challenges presented for both businesses and landlords alike. However, hybrid working is now fully embedded into our everyday working lives and, as a result, people are starting to understand exactly what they want and need from an office space.
Business owners are learning more about the functionality of their space and landlords must keep up with this shift. Tenants are now calling the shots and are on the hunt for more flexible leases, personalised spaces and offices that are bespoke to their brand.
As 2021 comes to an end, landlords arguably face their biggest challenge yet: how to capture the attention of businesses and get them into their spaces. To do this, they will be forced to pivot and adapt, and 2022 provides a fresh start to do so.
The ‘where’ of working has become less important than the ‘why’. The pandemic has given people the time to reflect and re-examine their lives and, as a result, the office has become less of a physical space and more of a broad set of values. Business leaders have pivoted away from outdated protocols and have recognised that to attract diverse talent, a flexible approach to work where employees can make meaningful connections is now what is needed.
Data has shown that most of the offices occupied by tenants this year were refurbished – evidence of a structural shift away from the traditional office set-up. Instead of moving into an office with a certain amount of static seats, employees want a space that facilitates connections and collaboration. After months of lockdowns, people are craving the buzz that comes with face-to-face interactions. That’s why we have seen a rise in workspaces that offer a blend of comfortable working and traditional office space, including breakout spaces, designated brainstorming areas and quiet nooks for ‘heads-down’ work.
The office of 2022 needs to encapsulate the changing attitudes, working styles and personalised preferences that have been formed over the last 18 months and give room for self-growth and collaboration, which will then lead to improved productivity, increased job satisfaction and staff retention.
What is becoming more apparent is the move away from traditional office leasing, which requires a sign-on for an average of five to 10 years. Businesses cannot plan in the way they used to, and they are now looking for shorter, more flexible leases that do not require as much commitment. What we will see in the New Year is tenants looking for a solution that matches their working style and can provide a space suitable for their personal preferences.
Many will also be looking for a more streamlined experience. The current model is complex and time-consuming, with business leaders having to deal with more than 80 suppliers to complete a transaction, which takes away precious time that should be focused on the business itself. The year ahead will see a rising need for a full service offering that removes the hassle of what would traditionally be a complex real-estate transaction. Full service solutions offer a bespoke experience, from finding and designing the perfect space to handling legal agreements and managing all suppliers – all on behalf of both the tenant and the landlord. This gives business leaders their time back to focus on what is important.
What we expect to see is the long-tail majority start to embrace this, as the market shifts to being predominantly tenant-led with landlords no longer dictating the space that businesses acquire. Businesses are no longer moving into a space where they are trying to fit in; they are creating their space that is fitting for them.
Steve Coulson is co-founder and chief executive of Kitt