ULI International ‘Future of Work’ Study Finds 'Flexibility' Focus

By Kerry Smith

A global survey of real estate players found “increased flexibility” to be a central theme going forward. Respondents expect increased remote work, including from home (96%) and outside the home (72%), plus an increased reliance on suburban satellite offices (67%).

LONDON – A global report to look at the impact of the future of work on real estate and cities over the next three to five years foresees a strong focus on flexibility, demanded by both workers and corporates, not only relating to work activity but also space and location. Increased flexibility will likely lead a flight to quality-over-quantity office space and a move towards flexible and tailor-made leasing models.

For “Future of Work 2020: A global real estate players’ point of view,” the Urban Land Institute (ULI) and EY surveyed 555 real estate professionals worldwide. The respondents included investors, developers, architects, planners and other service providers, and it focused on a post-pandemic timeline.

The result: International real estate pros strongly expect increased remote working, including more work from home (96%), more remote work away from the home (72%), and an increased reliance on satellite offices located outside cities (67%). The resulting ecosystem of workplaces will accelerate a blending of residential, hospitality and office spaces – and even the language of work will shift. The word “office” will often be replaced by the word “workspace.”

The majority of real estate professionals predict that more than 60% of employees will spend more than 40% of their time working remotely. Before the COVID-19 pandemic, about 20% of staff spent 20% of their time working remotely.

Still, respondents think physical office space will continue to play a key role, notably for creating a corporate culture (96%) and recruiting and retaining employees (93%).

More than half of the respondents (53%) expect their organization to need less office space, while 37% predict no change, albeit with increasing demands for healthy building amenities (94%) and more space designed for collaborative work (81%).

According to ULI, this may lead to a faster obsolescence of buildings and future significant repurposing of office buildings.

What changes should the commercial industry focus on now to prepare for the changes? The respondents said that the real estate industry should plan for increased demand for flexible office footprints (96%), flexible lease contracts (66%) and more widespread use of coworking facilities by large corporate occupiers (60%).

“Flexibility is the consistent demand we are hearing,” says CEO of ULI Europe Lisette van Doorn. “Employees expect it from their employers and corporates from their landlords. Especially over the shorter term, this focus is accompanied with a drive by corporates to save costs, as many try to cope with the negative economic impacts deriving from the pandemic.”

Van Doorn also found a “a strong focus on the quality and location of the physical space as a key element to attract and retain talent and expression of a corporate’s culture.”

According to EY Consulting Associate Partner Vincent Raufast, remote work makes real estate more critical.

“While the total office space is likely to decrease, the quality of real estate will be even more critical,” Raufast says. “The physical office space will play a key role in preventing a loss of corporate culture, less effective talent management, a higher staff turnover and a loss of creativity. It will need to meet new demands including healthy building amenities and more space designed for collaborative work, as well as formal and informal meetings with colleagues.”

It’s not just offices: The report suggests that changing styles of work will reach beyond buildings to communities and cities. Key changes that will impact beyond the office market include a need for easier access to online public services (93%), a need to develop more efficient local supply chains (92%), less need to commute (91%) and increasing pressure to focus on inclusiveness and health for businesses and people (91%).

© 2020 Florida Realtors®

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