The Covid-19 pandemic has changed the property market forever, and the office sub-sector is among the most affected. While there are glimmers of hope for residential and industrial properties, the office sub-sector has over the years already been experiencing an oversupply.
Naturally, this scenario was worsened by the coronavirus that has dampened the economy further, hence further impacting negatively on offices, said CBD corporate services head Victor Lim.
“Since many businesses occupying office space were classified as non-essential especially during the initial movement control order (MCO) which saw many offices shut down as employees worked from home (WFH),” he said.
Even as the government is rushing to revitalise the economy, it is clear that the demand for offices has dropped as many employers have inadvertently discovered the advantages of WFH.
“What employers discovered is that they can trim down the size of their offices to reduce cost as employees can still function effectively out of the office,” he said.
Changes have to be made
However, a new ecosystem has to come to the fore. For offices, an enormous change has to be made due to new norms. With Malaysia in its recovery MCO phase, more companies are evaluating their workspace commitment, Lim said.
Studies also show that companies are embracing new ways to create work environments that facilitate collaboration, cross-learning opportunities, and future-proof their operations, he said.
The International Data Corporation (IDC) reported that 93% of global enterprises had recognised the need to adapt their workspaces to align with the younger generation’s expectations.
It predicted that by 2021, 60% of Global 2000 companies would have adopted a future-workspace model that is flexible and intelligent with a collaborative virtual-physical work environment.
Smaller or bigger?
On the one hand, some employers might be looking for smaller offices that provide better sanitising aspects to cater to their workforce working on rotation basis to adhere to the physical distancing standard operating procedure (SOP). Others will seek out bigger premises to ensure that their employees are spaced out at least one metre apart.
Office designs will also change like individual cubicles or transparent barriers to separate workers. Better air circulation and purification system within the office will also be good drawing points for office owners. The point is to cater to the tenant’s needs.
The current climate has also shown the importance for businesses to be prepared with scalable and flexible space solutions to address their operational and regulatory needs promptly.
With conservative growth reflected amidst the pandemic, there is a greater emphasis on companies to reinvent themselves to be more resilient by adopting agile operational models.
Lim pointed out that the new norm also created opportunities for the health and wellness industry, which is booming given that people are more health-conscious nowadays.
From his experience, he said clients seek a conducive environment as a Launchpad for their businesses, so property owners need to adapt to the changes of the new normal.
“There is also a whole spectrum of tenancy negotiations that have to be taken into consideration like longer rent-free periods and greater flexibility in tenancy exit clause,” he said.
Lim noted that it is apparent that companies are starting to adapt to this new normal of workspace with a focus on flexibility, trust, and wellbeing.
As Malaysia continues to work towards recovery, companies need to acknowledge that there are new realities for enterprises which have taken shape in the new normal, he said.