More than three quarters of commercial real estate leaders believe offering remote or hybrid working will be critical to companies in the future, which is bound to impact housing needs.
Property investors are increasingly factoring in the rise of home-working when considering their next investment prospects, in terms of both location and property type. While uber-central locations are still popular, new modes of working are opening up more options.
A report from JLL has revealed how a large number of companies are planning to focus on offering hybrid, flexible and remote working options in order to attract and retain talent, with 77% of employers surveyed saying they believe this will be crucial now and in the coming years.
In terms of how this will affect the commercial property sector, 43% of companies are planning to accelerate investment in flexible space between now and 2025, and 51% say they will lease flexible space through a third-party provider.
Dr Marie Puybaraud, global head of research, JLL Work Dynamics, said: “The next three years will prove to be an inflection point for real estate as businesses plot their future path and rethink the purpose of their portfolio.
“The changes accelerated by the pandemic represent an opportunity to pause, think about a long-term real estate strategy and how it aligns with future business priorities.”
Going green in business and homes
For companies considering how their work space could impact their environmental and social goals – particularly with the ongoing focus on ESG [environmental, social and corporate governance] – changing how and where people work is an important issue at the moment.
More than three quarters of commercial real estate leaders in the survey (77%) said investing in quality space was a priority. A similar amount (74%) said they were likely to pay a premium for green credentials, and 56% of occupiers said they plan to do so by 2025.
As far as hybrid working goes, travelling less is another reason why many people are choosing to spend more time at home than in the office. This could be for both cost and environmental reasons, but is something that residential property investors are also mindful of.
As these trends become more important on the commercial side, the residential side is often offering more homes with office space, or even self-contained workspaces such as garden offices. These are proving a major selling point for homeowners, as well as landlords offering properties to tenants.
Rental homes for hybrid working
The well-reported ‘race for space’ that dominated the height of the pandemic years may have shown signs of easing, with more people returning to city centres and hybrid working overtaking pure home-working.
But it is certainly still relevant when looking at property investment, as offering a home either with dedicated work space or an additional bedroom is more popular than ever.
Earlier this year, a study by FJP Property Investment found that for 23% of workers, the rise in hybrid working and home-working has changed their property priorities. Almost half (44%) value space more highly than ever since the lockdowns, and 25% want a greater square footage in their property.
Good transport options are still important for property investors considering rental homes, though, as for most workers there will be days when travelling to the office is required. Tenants also still need access to good amenities, whether that be within walking distance or on public transport.
Landlords trying to decide between a one-bedroom or a two-bedroom property might want to take such trends into consideration, as tenants may be willing to pay more to live in a home with an additional bedroom to allow them to maximise their hybrid working options.
