Office Sector In A “State Of Flux”
The office sector continues to experience significant disruptions and is now entering a “full state of flux”, according to a report by the Urban Land Institute (ULI).
With remote work gaining popularity during COVID, the physical office’s role in the workplace has evolved, with just 14% of businesses believing their current office portfolios align with their business objectives.
The report found the need for Activity-Based Working (ABW) has increased, along with the flexibility, communication, and collaboration between landlords and occupiers that’s needed to optimise an asset’s potential.
Although landlords and occupiers expect increased lease flexibility and agility in the next five years, their long-term priorities differ. However, both parties agree that attracting talent is a top priority and landlords should consider offering flexible office space and leasing arrangements to cater to evolving tenant needs.
Businesses are increasingly looking for office spaces with amenities and services, such as food and beverage options, outdoor areas, childcare facilities, gyms and event spaces.
The report found that landlords must adapt their legacy models, particularly in lease structures and valuations, to meet the changing needs of businesses.