|Monday, 26 June 2023, 21:00 HKT/SGT|
Source: NAI Global
NEW YORK, June 26, 2023 - (ACN Newswire) - NAI Global has released survey results on the impact of remote and hybrid work trends from its international offices in Europe, Africa and Asia-Pacific.
Easily one of the most unique aspects and consequences of the pandemic has been the work-from-home phenomenon (WFH), or as we eventually adopted, related phrases such as work-from-anywhere, digital nomad, or simply, remote and hybrid work. None of us working today, or in the history of the modern workforce, have been forced to operate office-oriented businesses and tasks from anywhere but the office - traveling salesmen, deal-making M&A professionals, auditors and others are obvious exceptions. By late summer of 2020 and the early stages of lockdowns, stories about the new working trend began appearing in all matters of media and they have not let up.
After a recent story ran in the Wall Street Journal (WSJ) that was principally focused on remote and hybrid work trends in Europe and Asia, and its impact on office markets across the world, NAI Global reached out to more than 1,000 of its brokerage, management and property consultant specialists and professionals throughout Europe, the Middle East, Africa and Asia Pacific. Coincidentally, as the survey results were being compiled into narrative form, Bloomberg Intelligence released its own report on remote work's impact on European office markets.
According to the WSJ, more Americans embraced remote work and turned their backs on offices, with U.S. office occupancy rates ranging from 40% to 60% in America's largest cities. These figures, usually attributed to Kastle Systems, the card-swipe company, are good benchmarks for office occupancy rates in general, though since the company started publishing its data, we've advised that the metrics may not show the whole picture. They are believable, yes, but slightly flawed because most American office workers don't work in the 10 major markets which Kastle Systems tracks. Thus, in accordance with our internal polling of NAI Global offices in the lower 48 states (where there are approximately 225 NAI Global U.S. offices), we believe that cities in every quadrant of the U.S. have more people working from offices than not.
Looking abroad, the WSJ reported that office occupancy rates in Europe and the Middle East are running 70% to 90%, and even higher in Asia, where rates ranged from 80% to 110%, which means that in some cases and places, more people have been coming to the office lately than before the pandemic.
There are a myriad of reasons and explanations for these different data readings and WSJ pointed some of them out, including cultural differences, commute times, and living arrangements, among them. They are not unlike what we found in our survey of NAI Global professionals outside of the U.S. Here's a summary of a few responses received after our email query, with attribution to responders and their respective cities and countries.
"In Frankfurt, one of Europe's most important financial centers, there is an ongoing "war for talent" and as a result, employers are aware that they have to compete with each for that talent. As a result, more and more companies are asking themselves, 'how do I design my office to encourage and attract our people to return to the office?' It is such a central issue that "working from home" has become an important element for employees of all ages. Therefore, it is not surprising that employees are averaging 1.4 days per week at their home offices, and this is prevalent throughout Germany. According to official statistics, Germany is thus below the global average. However, the modern office itself remains an essential factor for corporate identity, that sense of "we" and, above all, communication among employees. Pre-Covid, everything was done to significantly improve communication within companies through new working environments; it is precisely this communication, which is so important, that is reduced to a minimum through "working from home."
Andreas Krone, CEO, NAI Director, NAI apollo, Frankfurt, Germany
"In Hungary, hybrid work arrangements continue to be enforced, with a majority of office workers being guaranteed an average minimum of two days per week to work from home. However, in the case of Business Process Outsourcing (BPOs) and Shared Service Centers (SSCs), it is not uncommon for employees to have the opportunity to work from home for three days per week. The option to work remotely has become a crucial component of the employee compensation package, and employers who are less accommodating of this trend may face higher levels of employee turnover and difficulty in attracting new talent. As a result, office tenants have relinquished, on average, 20% of their previous office space."
Erika Loska, Head of Leasing Services, Partner, NAI CELand, Budapest, Hungary
NAI Global Takeaway: European business leaders appear to face similar challenges to their American counterparts - even though unemployment is higher in Europe, on average, than in the U.S., and mainly there is competition for the best employees. On the importance of collaboration, again the business culture in Europe favors high levels of inter-connectivity between employees. However, when it comes to business task work, whether it is inputting data, accounting and administrative process work, which can easily be done remotely, the scale tips toward greater remote work. That has been true in the U.S., with 'coders,' or the tech employees that spend much of their time in front of monitors, being the most vocal about their strong preference for remote working arrangements.
"In Luanda, the capital city of Angola, despite the difficult commuting, professionals have returned to their workplaces at a high rate. The intermittent internet connections outside of the city are effectively encouraging office-based professionals to return to their offices, where web connectivity tends to be stronger and more powerful."
Nuno Serrenho, Principal, NAI Altys Africa, Luanda, Angola
NAI Global Takeaway: Mr. Serrenho's quote speaks for itself, infrastructure is an issue in certain places of the world and office-based work certainly requires high quality internet access. (Similarly, no one is setting up headquarters facilities in certain interior states of the U.S. because cell service can be spotty in many of the plains states and locations). Commuting is the biggest deterrent to higher rates of office occupancy in America's biggest cities, as well as other large metros throughout the world, yet most of these large metros have good internet access within a 100+ radius of them.
"China started with strict lockdowns in January 2022 so when people did return to work, they were happy to do so. Despite some of the obvious tradeoffs - commuting in rush-hour traffic, for example, most people in mega-cities live in smaller apartments so going to an office provides a relief from that. Besides, culturally being out-and-about is something people like to do here - dressing up, wearing fine jewelry, shopping and taking business lunches. There is also normal human pride in doing good work and feeling like something was accomplished at the office. Fortunately for most office workers, they like being there, because at this time most Chinese companies are only offering remote work one day a week. Yet beyond the requirement to the return to the offices, managers feel strongly that there is increased efficiency in being face-to-face - to share ideas and experience in an informal and casual way, as well as to develop and grow company culture."
Bjarne Bauer, SIOR, Managing Partner-Commercial Real Estate Transactions, NAI Sofia Group, Shanghai, China
New Zealand and Australia
Opinions on remote and hybrid work diverged in two of the most prominent Asia Pacific markets for NAI Global, and much of it appears to be from city (or market) size, and driven by commute times - or the lack thereof.
According to Andrew Bruce, the office workplace has changed forever. Hybrid working models are here to stay as businesses juggle their desire to get employees back in the office against employees' demands to continue working from home. Compromise is the new norm with work-from-home options i.e., 1-2 days per week now common. Office space is being redefined, Bruce continued, and employees don't miss coming into the office, what they do miss is the social contact and personal collaboration etc. There is much greater emphasis now placed on improving office design with businesses seeking bigger kitchen areas, breakout rooms, collaborative lounges etc. - all designed to give employees a reason to want to come into the office.
Andrew Bruce, Branch Manager/Business Owner, NAI Harcourts, North Shore/Auckland, New Zealand
"New Zealand had a very quick response to the threat posed by Covid 19 with our government forcing the country into a total lockdown on 25 March 2020 and again on 21 August 2021. We all got to work from home with many predicting a change to remote working. Whangarei has a population of around 100,000 residents so we don't have any real traffic issues with most people being able to commute between work and home in 15-to-20 minutes time. Companies here did not take long to realise the disconnect and lack of collaborative thinking resulted in a negative impact on the productivity for their businesses. The result we have experienced is an in increased demand for good office space which is exceeding supply. We still have ample second-rate space but not so many takers for this; this is wholly due to the poor quality of the office space itself. While working from home is an ideological concept it has not worked in reality for us."
Peter Peeters, Commercial and Industrial Specialist, NAI Harcourts, Whangarei, North Island, New Zealand
"Post Covid, we have noticed a rather large decline in the demand for office space in our commercial sector. I believe that Covid in a way made corporations and smaller businesses alike realise that they can run their business' successfully whilst having their staff work from home and save large sums of money in fit-outs, outgoings and of course rent for properties. We are seeing office spaces, namely on the first floor that will really only work as an office space and have no other desired uses - they will stay on the market for extended periods of time, up to 12 months, in a market that previously had such a high demand."
Jack Maunder, Commercial Sales, Leasing & Management, NAI Harcourts, Greater Port Macquarie, New South Wales, Australia
"Around Australian capital markets, the return to in-office work has appeared to be considerably faster than many international peers. Most markets are reporting between 70-80% of pre-pandemic levels. Despite this statistic, what does appear to still be at play is the hybrid/work from home (WFH) "some days" model. This trend does leave a somewhat ghostly feel in some of the high street offices, where there appears to be a much bigger push back from employees who have enjoyed the WFH model. Australia's two biggest cities, Sydney and Melbourne appear to be grappling with this problem the hardest with many CBD retailers experiencing and reporting lower foot traffic and reduced retail sales. The recovery is underway, but it still has some bumps in the road ahead."
Jason Luckhardt, National Manager, NAI Harcourts, Brisbane, Queensland, Australia
Final Takeaway and Conclusion: Like other markets, there is some bias toward wanting the return to office work numbers to be greater. People in offices make the areas around their buildings more robust and dynamic. Plus, the NAI Global responders all work in the real estate industry, after all, so they are intrinsically motivated to see office demand increase. City density and living standards, city sizes and commute times clearly are driving issues in relation to WFH preferences in the Asia-Pacific region, just as they are in the U.S. and Europe. Another commonality is that landlord and property owners have recognized the need to invest in their office buildings, and for occupiers and tenants to do so as well, by retrofitting interiors and making office space more welcoming, collaborative, and ultimately, attractive. These are universal sentiments from NAI Global professionals, regardless of city, continent and culture.
Gary Marsh, Marsh Marketing 415.999.3793 or email@example.com
Lindsay Fierro, NAI Global 212.405.2474 or firstname.lastname@example.org
Topic: Press release summary
Source: NAI Global
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