Hybrid working: how real estate is affected by the new way of working
As vaccination programmes are widespread and cases are starting to fall, the next question is: what happens now?
Although offices have started to reopen, many companies are giving their employees the option to work from home. This model, known as hybrid working, enables much more flexibility for workers and more freedom over their working day. What are the other advantages of this model? Are there any disadvantages? What does this mean for the real estate sector, both residential and commercial (offices in particular? Read on to find out more...
4 Benefits of Hybrid Working
Flexibility is key. In the majority of cases, hybrid working implies having a more flexible schedule, allowing people to navigate their lives with much more control over their work schedules. They have the freedom of working from the comfort of their own home, or they can choose to come to the office for in-person meetings and take advantage of the benefits of working as a team. This allows teams and employees to take advantage of the benefits of remote work and those of working in a team.
Allows for more free time. Primarily, by saving time from commuting and also the dynamic of working by setting objectives. By establishing a particular objective or task for a concrete period of time (a week, a month, a trimester), as long as it is a achieved, it's no longer necessary to monitor the hours spent working. This usually results in a better management of time for workers and this translates into a better quality of life, mental health and general wellbeing of the company.
Increased productivity. There is some disillusionment whereby working from home may decrease productivity. However, according to Forbes, and many other studies, data shows that productivity increases in hybrid working models as they incentivise people to work harder and get more done in a shorter amount of time.
Economical and Environmental impact. According to Kate Lister, expert in helping employers optimise flexible and distributed workplace strategies, there could be potential savings of $600-$6000 per worker. The main savings are from transportations, car maintenance, work attire and eating out. Furthermore, if less people are commuting to work on a daily basis, the carbon footprint of each employee decreases.
Overall this model presents itself as a positive change and is welcomed by many. There are countless benefits to be seen and ultimately it looks like this could be the new future of workplaces.
4 Disadvantages of Hybrid Working
Lack of socialising and interacting with others. There are concerns that if people stop going into work in the same capacity, they won't bond the same way with work colleagues and overall it will significantly reduce their interactions with others. In turn, making it more difficult for the company's work culture to be shared and separated.
Lack of harmony within team. With regards to organic social interactions and conversations, there is clearly the disadvantage of missing out on these. In a more practical sense, if we imagine a video call for instance, there will be employees able to join in person and remotely. However, those in person will be able to further the conversation and expand on ideas more and those who are remote will miss out on these interactions.
Tools and resources in the office. Offices are designed as places of work and therefore they are kitted out with all the tools and technology necessary for their employees. This may include screens, keyboards, ergonomic chairs and other gadgets and also basic stationery supplies. When people are working from home, the vast majority don't have an exclusive professional space (at home office) and will be working from their living rooms or bedrooms; which aren't necessarily optimal productive working places.
This model doesn't work for everyone. As commented by Kevin Shtofman, COO of NavigatorCRE, "The pandemic exposed those that could keep up with the hybrid model of working". This means that many industries, especially those that require physical participation, will be struggling to adapt to this new model and will suffer as a consequence.
How is the Real Estate Sector Affected?
In terms of residential real estate, post-hybrid working has seen workers rapidly relocate to more affordable areas outside of major cities, with the compromise of commuting once or twice a week. Essentially, people no longer need to live close to work if they are frequenting it much less often and in turn, this will allow them to save money and increase productivity. Furthermore, there has been a surge of buying holiday homes, influenced by the pandemic and travel restrictions.
Due to so much activity in the market, it has allowed for the real estate sector to keep afloat. This is why the popularity of online visits has accelerated the market. At Floorfy, we are changing the game of real estate, reducing in-person visits by 70%.
Furthermore, if people increasingly decide to work from home, they are more likely to spend money improving their home spaces. Architects, interior designers and home developers will definitely benefit from this lifestyle change, without a doubt.
With regards to commercial real estate, there has been a significant decline in office leases. Amongst many, UK REIT British Land, reported in May 2021, COVID19 had seen its offices and shops lose more than £1 billion, with offices losing 3.8% of value over 12 months.
However, some offices have taken a completely different approach, by encouraging their employees to return to work, with a promise to implement measures to ensure a safer workplace. This includes contactless entry, sanitizing stations, touchless taps and more open spaces. As well as ensuring safety, they are adapting to the hybrid model of working and creating a more collaborative office environment. This means adding more shared spaces, more technologically advanced meeting rooms, green spaces and open air patios equipped for working from.
Therefore, there is a lot of investment being made into re-designing office spaces to encourage workers to return and enjoy a new way of a working life.
What does the future of workplaces look like?
Although offices are trying to improve their workspaces, in CBRE’s most recent Workforce Sentiment Survey of 10,000 employees across 18 countries, 85% of respondents said they would prefer to work virtually at least two to three days a week going forward. Now, there are countless new technologies enabling this to be a sustainable model of working.
For example, virtual reality is truly changing our way of interacting, taking hybrid working one step further and mitigating the disadvantages. Think about the Metaverse and the progress being made there, providing ways of interaction without physical commute, simulating office work spaces. In the words of Mark Zuckerberg, "You would still have that sense of presence, shared physical space, those chance interactions that make your day; all accessible from anywhere." At least you could have the feel of being in the office without physically being there.
There is definitely a growing trend towards hybrid working models, our lives are adapting to a new reality and the real estate industry will evolve, adapting to these changes as much in the residential sector as the commercial one.
Links of interest: The Green Future of Real Estate: Sustainability and ESG Investing
LinkedIn: FLOORFY Virtual Visits
Youtube: Floorfy in 30 Seconds