Remote Work Reshapes Office Demand: Newmark
Almost all industries have recovered from the COVID-19 pandemic’s effects and economic activities are getting back to normal. Nonetheless, the corporate real estate sector, heavily impacted by social distancing measures, is still experiencing changes. Experts recommend adapting to new hybrid working schemes, which reshape the demand for offices.
Industry insiders believe that with the adoption of hybrid work, demand for big offices will drop since companies will require less space. Other companies could also choose to relocate their offices to cheaper areas.
According to a poll conducted by Newmark Argentina, 85% of respondents returned to their workplaces in 2022, of which 65% returned under a hybrid scheme. Over 74% of workers are happy with the working scheme they have.
The new reality for corporations will force real estate companies to readapt their spaces to make them more attractive and safer. “This should push for a new approach from designers to adapt the design and optimize spaces with an employee-centered perspective. Companies must focus more on the quality per square meter rather than the quantity of space,” said María Valdez, Sales Manager for Facilities Maintenance, Newmark.
Similarly, as offices have surplus space, owners must consider subleasing it, which at the same time would increase the demand for refurbishment services to optimize spaces.
Rising inflation is also impacting the market. As optimization is key to achieving a more employee-centered office, companies must also look at the costs of refurbishing workspaces. According to Newmark, refurbishment expenses could grow from US$807/m² to US$2,100/m². However, the firm recommends consulting updated information about the material prices as inflation is forecasted to be constant during 2023.
Newmark emphasizes that companies still believe that physical spaces are important for both companies and employees since they serve as social spaces. According to Newmark’s poll, over two-thirds of the interviewees agreed that team meetings and interaction are the main reasons to return to the office.