Office space throughout Australia will still be required even after people experience working from home during COVID-19, leaders in commercial property say.

In a webinar hosted by the Property Council of Australia, Darren Steinberg, CEO and Executive Director of Dexus; Kylie Rampa, Chief Executive Officer, Property, Lendlease; and Jonathan Callaghan, Chief Executive Officer, Investa, were asked how demand for office space would be affected now that employees and companies have experienced remote working.

In general, the three acknowledged that remote operations during COVID-19 have worked more smoothly than expected.

But they said the experience had highlighted the role and value of office space.

This is the case not only as some home environments are unsuitable for working but also as working together in offices can help to facilitate teamwork, collaboration, induction of new people and corporate identity.

“If anything, this has for me emphasised two things which are important, Callaghan said about working from home during COVID-19,” Callaghan said.

“First, we can work flexibly. There are people in my business who were cynical about the efficiency of people working from home. We have proved once and for all that working flexibly does work and that you can be efficient when you are working from home.

“But two, and probably most importantly, it has proved to me the importance of being together as a business and having contact with people you work with.

“Working from home is not a long-term solution. We have people who are almost starting to get a little bit distressed from working from home for such a long period of time. They don’t have the facilities at home to be comfortable – they are in shared accommodation; they are in a small house with a young family – it just doesn’t work.

“Most important, there is the need for the business to connect, to collaborate together and to feel part of that community which is the business. I feel that that has been emphasised and I feel that the importance of CBDs in particular and working together has really been emphasised as a result of this crisis.”

Rampa and Steinberg agree.

Pointing to the experience of many US tech companies, Rampa said firms who experimented with working from home have been forced to change tack and bring operations back into the office in order to create a sense of culture and ‘place’.

Indeed, she says the focus of many of Lend Lease’s tenants involves attracting and retaining talent and developing a strong corporate culture.

When doing this, she says offices remain the focal point of activity.

Whilst remote working has worked well during COVID-19, Rampa points out that many who currently work remotely are familiar with their colleagues and have established working relationships.

Challenges may be greater longer term, she said, where new workers need to come on board.

Steinberg, meanwhile, says culture and the need for connectedness will drive workers back to office environments when the pandemic is over.

Office Space Will Change

Whilst office space may still be needed overall, however, the three leaders say that how this is used will change.

Notwithstanding the need for offices, the shift toward flexible working arrangements will continue.

In cases where home environments are suitable for working, some employees will embrace opportunities to spend quiet time on projects away from the office.

Some companies, meanwhile, will question whether they need all of space which they currently occupy.

As the virus underscores the need for distancing and healthy work environments, meanwhile, the density of space may be reduced whilst there will be greater focus on design and well-being.

Potentially, Rampa says, ‘hub and spoke’ arrangements could gain in prevalence as tenants reduce the cluster and concentration of their workforce and consider spreading their office space.

Overall, Rampa said the impact of COVID-19 on office space demand will be broadly neutral.

“You’ve got these positive and negative forces,” she said.

“Less density means more floor space but you combine this with increased flexible working habits and it might just net back to exactly where we are.”

“It will be different, but I think fundamentals (of office space demand) are going to remain the same.”