Office landlords face grim future as quarter of UK firms plan to downsize
The UK’s office landlords are facing the prospect of a difficult future post-pandemic after reports emerged that around 26% of British businesses are planning to either close or downsize their workspaces in a move toward more flexible, hybrid models of working.
New research has indicated that53% of businesses are planning to offer either remote or flexible working policies, while 30% expect that their employees will be in the office between one and three days per week.
Meanwhile, 14% of employers said they did not expect their workers to return to the office at all once the pandemic has subsided, according to the research by YouGov for HR tech firm Applaud.
The shift toward hybrid working patterns is also expected to be accompanied by a greater focus on increasing staff engagement and improving worker experience remotely, with around 35% of companies planning to develop employee engagement roles distinct from human resources.
Another 18%, meanwhile, are reportedly investigating whether to provide their workers with better pay and promotions in the coming months.
“As expected, many businesses are starting to cut back and downsize on office spaces, and these figures highlight the volume of organisations that are following suit when deciding on business operations post-pandemic. The hybrid working format which sees workers operate from a part-home, part-office environment, is clearly becoming the model of choice for a majority of businesses. This ‘hybrid’ model will appease cost-concerned employers whilst maintaining benefits such as flexibility and wellbeing improvements, all the while injecting a social element back into workspaces”, said Sridhar Iyengar, managing director of the European arm of web-based office software group Zoho.
“As these businesses take this route, it is crucial that decision makers equip IT teams with better long-term solutions to surging demand for their services. This includes adopting a scalable suite of SaaS and mobile applications, which are designed to enable and streamline head-to-toe hybrid working. The right tools, coupled with the right leadership approach and the right communication, should lead to happy and engaged employees, whether in the office or working remotely”, the MD added.
While the trend toward hybrid working may be a boon for Zoho and other online work software firms such as messaging platform Slack Technologies Inc (NYSE:WORK), remote conferencing specialist LoopUp Group PLC (LON:LOOP) and Teams owner Microsoft Corp (NASDAQ:MSFT), the report is likely to make for grim reading for the UK’s biggest owners of office space, including blue-chip firms British Land Company PLC (LON:BLND) and Land Securities Group PLC (LON:LAND) as well as mid-cap property group Derwent London PLC (LON:DLN).
Shares in British Land were up 1.5% at 543.8p in early afternoon trading on Monday, while LandSec rose 1.1% to 750.4p and Derwent climbed 1.2% to 3,520p.