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COVID-19 The Occupier Update

James Maddock • 21/05/2020

Life on Mars is a TV show that takes a police detective back from 2006 to 1973 and things were not quite the same. We are doing this in reverse. As Apple reopens another 25 stores across America (that’s 100 globally out of 510) they will look the same, but everyone wears a mask, your temperature is checked at the door, its limited access and cleaners are front and centre. This is the new gold standard for all businesses. 

Two key components will drive our ability to leave lockdown. Data and technology. Global law practice Eversheds Sutherland has said it plans on spending more money on technology and less on office space in the future. Our industry needs to vastly improve its collection and use of data sets with a focus on understanding what makes employees productive - not just now (in the middle of a crisis) but also in the future.  

Building choice will now have smart systems at the top of the check list. Thermal scanners and thermometer ‘guns’ will check your temperature in the building lobby. Your smart phone will book a desk for you, then plan your commute. It will allow you through security and into the lift, guide you to your desk, whilst making you a coffee. 

This is ‘no touch business’.    

 


14 May

Predicting the future is never a good thing but planning for a better one is in our grasp. We need a new vocabulary and to think differently about how we work. Remote working for example. Remote from what? Every survey says most office workers are as productive or more productive working from home. Technology helps but it is not the only important factor - it doesn’t ‘do’ emotional intelligence - yet.  

Industry has a similar set of challenges - as always it will be those businesses that make improvements to drive better productivity, that will perform in the next few years. Those that want to return to how things were will be the losers in this new economic cycle. Just in case manufacturing will drive some different decisions. 

We need to focus on how we redefine work processes and interactions to ensure a distributed workforce. Working from distributed workplaces can gel teams, enhance trust, build teamwork and improve productivity. This is in our gift as an industry to lead. 

My biggest hope is that this new era of employee focused work settings will also drive greater focus on ESG and that the ‘Greta Moment’ is not confined to history, as companies focus on survival. Governments have a massive part to play in all of this. 

 


7 May

As the term gap year takes on a new meaning for all, we can see an easing of restrictions approaching. Pret, for example, is open in London across a few key sites next to hospitals. Government guidance on businesses re-opening is the employer is responsible for taking all necessary precautions and this can vary between type of job setting, and it has identified seven. The Health & Safety Executive will be on hand to enforce the new rules.   

Office workers should expect to be at home for longer, assuming they even want to try and get on public transport followed by a lift at work, whilst wearing a mask! All the data suggests the majority are more efficient working from home provided they have good technology. CEOs have latched on to this and a few have been public, sounding the death knell of the office as we knew it. Cushman & Wakefield’s nuanced view is businesses will want a range of locations (for office workers) from home working through local, regional and city locations, dependent on work type. 

Businesses are starting to reflect on their old business model - optimising for efficiency - but at what cost? Expect changes once lockdown ends and we have dealt with the immediate crisis. 

 


30 April

The ‘R word’, ‘Build Back Better’, ‘social distancing’ are just some of the terms that have filtered into our vocabulary as we face the biggest challenge of our lifetimes. What should business look like in a few weeks as lockdown comes to an end?  

Employees need to trust that their employer has a plan, that they execute and that delivers a safe work environment, as well as a better business. The Government needs to deliver safe transport. It also needs to make the collective ‘we’ as important as the ‘I’, meaning opinions about data privacy need to loosen enough for society to rebuild itself. 

An unintended consequence should mean the best businesses deliver more home working and re-examine how and where work happens. Balancing working from home and face to face creativity will reduce the amount of office space occupied. Industrial supply chains will alter, distribution direct to the consumer will increase and receive more focus from businesses. 

The exhausted road warrior of the 1980s has become the Zoom fatigued employee of the 2020s…burn out will still happen unless we adjust how we work and expect our colleagues to interact. We need to look to technology to improve the process of work and help redefine what’s important. Challenging times. 

 


23 April

We are facing a structural break in the economy and this means businesses will innovate/pivot – choose your expression – and this will bring changes to the property portfolio that corporates really need - amount, cost, location, tenure, safety - the property industry’s own structural break. An FT leader recently took Mark Twain’s oft used quote about his death in a leader article that concluded “today’s enforced homeworking experiment looks set to prove the enduring appeal of a good office”.  The point is that change is required to achieve this. 

The smart corporate is now planning for that ‘good’ office or industrial facility – the pandemic curve is flattening across the world at varying rates and the move to the new property normal needs to be planned now. Cushman & Wakefield is launching this week its Recovery Readiness: A How-to Guide for Reopening Your Workplace based on our experience in Asia and a global team of thought leaders.  

Every corporate is re-assessing its property needs, the lay out of space and new working protocols. Property cost could easily increase with additional costs of cleaning and security required. Staff wellness has never been so important, nor has the need to involve them in decision making. Their safety is paramount. 

 


16 April

It seems increasingly likely that over the next 2 months business will be allowed to open again, in some limited way, dependent upon country legislation and any re-occurrence of the novel coronavirus. Every business is weighing up its need to get back to work against the wellbeing of the employees.

Governments need to determine how we can use public transport safely. Landlords need to ensure their buildings are as safe as possible (from the car park to the tenant space) and are operated in a way that the tenants agree to.

Industrial and office occupiers face a similar challenge: rearranging how and when employees can work to maximise their health, as well as their safety. Workers won’t enter a building unless they feel safe; the ‘6 feet office’ is here to stay. 

As a property industry, we need to look at the business response to the pandemic (competitors cooperating and teams working across industry). The real estate industry needs both the landlords and occupiers (as well as the banks) to work together to determine the best possible outcome for everyone. Both parties have a cost to absorb and need to do this in a collaborative and fair way. 

 


9 April

Many employees are still at their place of work - so the rest of us can be at home. Key priorities for corporates right now are dealing with whatever recession we go into - V, U, or worst case, L.  
 
Across EMEA every office and industrial project is under review. Difficult discussions with landlords (and their banks) about rent reductions/holidays/part payments will happen as we approach the June quarter date. Legal terms and conditions will also be reviewed. 

With 5G upon us and the use of tech tools having grown in acceptance overnight, business leaders are now thinking about the physical and virtual office differently, to the advantage of both the employees and the bottom line. Employees will want something different when they return. 

A heightened focus on the employee inevitably leads to thinking about future changes that are now inevitable.

Our new series of podcasts titled Rebalancing the Work-Life Experience reflects on this 'new normal' co-working environment as does Cushman & Wakefield’s Experience per Square Foot™ tool. 

 


2 April

The early days of lockdown have seen the Facilities Management teams across EMEA do an incredible job of deep cleaning business premises; helping those staff who are needed on site and ensuring essential building infrastructure is maintained. 

Industries all have their own challenges: 

  • Financial institutions initially split teams into 2 or 3 groups to have some in the office, others in back-up space, and some at home. Most are now at home. 

  • Manufacturing/packaging companies servicing the food and pharma markets are flat out trying to increase output. Additional warehouse space is often needed  as they ramp up.

  • Tech companies in the communication space are increasing capacity to manage the surge in usage. 

Now we see current building projects being paused across the region. Construction crews are standing down and space fit outs cannot be completed. This means businesses will not want to close deals and use rent free periods without the ability to fit out the space and without knowing when their workforce can return to the workplace. Preserving capital is paramount to all businesses right now, and cost savings are being made wherever possible. 

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