A recent study of 1,000 Corporate Real Estate (CRE) leaders across the world suggests the next two years will be crucial for the industry, with hybrid working taking centre stage. What does this mean for CRE in 2023?
Hybrid working is only going to get bigger: that’s the message emerging from the Jones Lang LaSalle (JLL) Future of Work 2022 survey along with research by IWG and other firms. It all makes interesting reading for brokers and landlords with property to fuel the rising demand for flex space, as well as for property decision-makers. In this article, we delve into the findings of the latest research and what they mean for you.
Demand for flexibility
At a time when a legislative agenda towards hybrid working looks set to increase demand for hybrid across Europe to an all-time high, research from a number of organisations shows that hybrid is here to stay. The JLL survey, for instance, questioned 1,095 senior decision-makers in the CRE industry in countries around the world, ranging from the UK to Hong Kong, Australia to Brazil. Its findings paint a compelling picture of the status of hybrid working in the next two years, with 53% of those questioned intending to make remote and hybrid working available to all employees permanently by 2025.
The reason? Employees want flexibility, and forward-thinking employers realise this. Indeed, 77% of those surveyed by JLL agree or strongly agree that offering hybrid working will be critical to attracting and retaining talent, with the same percentage anticipating a stronger mandate for change by 2025. This tallies uncannily closely with IWG’s own findings, in particular that 77% of employees say a base closer to home is a must-have benefit that will inform future job applications.
The JLL survey is only the latest to have highlighted the fact that employees are happier when hybrid; last year, the PwC Remote Work Study found that 87% of workers prefer this way of working. In IWG’s research, around half of all employees went even further, saying they would look for another job if they were asked to return to the office five days a week.
But with this rising investment in CRE, what are organisations looking for when it comes to their office space? One thing that’s clear from the JLL survey is that green credentials will be an important factor, with 74% saying that they’re likely to pay a premium for eco-friendly office space and 56% planning to do so by 2025. Little wonder, given that sustainability has become vital to business credibility.
Part of being more sustainable is, of course, cutting commuting times, and that means that office space needs to be nearer to employees’ homes. IWG founder Mark Dixon points out that IWG’s workspaces outside London’s orbital M25 motorway have surged in popularity during the pandemic, with towns on the outskirts of the capital emerging as working ‘hot spots’, while demand for space in the City of London has dropped 26%. In the last two years, almost all new IWG centres have been opened in non-city environments and regions away from major urban areas.
For brokers, landlords and property decision-makers, the upshot is clear: thinking about what’s good for the planet isn’t just good for the planet. Going green goes hand-in-hand with hybrid, given the shorter commute times and fewer overheads already associated with flexible office space located in employees’ communities. This ties in with the findings of a 2020 IWG survey, which discovered that 92% of respondents want a greener, more sustainable way of working with reduced need for unnecessary commutes.
Collaboration is the name of the game
Finally, collaboration was a theme running through a couple of the strands of insight highlighted in the JLL survey. The workplaces of the future place greater emphasis on collaboration, with dedicated desk spaces soon to become a thing of the past in favour of open working environments for 73% of those questioned.
With employees in the office less under a hybrid model, the times they do head into a shared work space now look different, with more of an emphasis on the teamwork they may otherwise feel lacking when working from home. As the number of flexible office spaces in the UK looks set to double by 2026, now is a crucial time for brokers and landlords to market property to suit hybrid working.
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