Offices will see an increasing ‘hotelification’ in post-pandemic life, according to the chief executive of a property landlord company.
Gerald Kaye, chief executive of landlord Helical, who was speaking on his company's annual results said the office sector was on the “cusp of considerable change” and cited four key trends that will shape the use of offices.
Kaye believes that the first of these is sustainability. He said: “Tenants will want to occupy the most sustainable and environmentally favourable buildings to achieve both their own net-zero carbon targets and those of their stakeholders. For the same reasons, investors will actively seek to acquire these buildings. We believe there will be a ‘green’ rental and yield premium for the most sustainable assets.”
Wellness is also high on the agenda. Kaye said: “In a post-Covid environment, tenants will require the most efficient and up-to-date air conditioning systems to minimise the risk from airborne viruses. Sensors showing air quality in a building will be essential and office density per worker will decrease so employees will benefit from a more comfortable environment.”
The third trend, says Kaye, is greater use of technology to optimise environment and workplace experience. He said: “Sensors that record occupation levels will improve energy efficiency and the management of buildings.”
The fourth and final trend, according to Kaye, is "enhanced amenity”. He said: “There will be greater demand for secure bike parking and high-quality ‘club style’ changing facilities. Buildings should provide an attractive working environment with food and beverage facilities close at hand. As part of this enhanced amenity, we will see an increasing ‘hotelification’ of office buildings, with five-star management a necessity. Assets are moving from passive, low-risk, long-lease investments to intensively managed shorter-leased buildings where maximising tenant retention, rental growth and building performance will be the priorities.“
Kaye said there would be “bifurcation in the office sector as the ‘real’ grade A buildings, which incorporate these facilities and amenities, diverge from the rest in both capital value and rental growth".
He added: "I would expect this pattern to accelerate as tenants seek working environments that match the expectations of their employees."
He added that "Helical’s current portfolio already incorporates the attributes identified by these trends and, for that reason, both our rental and capital values have performed well".