May 26, 2021
New research from MRI Software, claims that 71 percent of commercial occupiers say the mass shift to remote working during the pandemic has fundamentally changed their long-term approach to space usage, and yet 69 percent of landlords expect no lasting impact from COVID-19.
MRI partnered with CoreNet Global, to survey 200 tenants and 50 landlords across a broad cross-section of industries worldwide. The findings offer insights into key post-pandemic views on the return to work and indicate critical differences in the expectations of commercial tenants and landlords.
The survey report, MRI Software Market Insights: Getting Back to the Office, claims that over half of business occupiers plan to lease less space after the pandemic, yet over half of landlords don’t see their tenants’ requirements changing.
56 percent of occupiers say they will need less space, with the vast majority expecting fewer employees onsite at any one time; whereas 60 percent of landlords see their tenants leasing the same amount of space, with only 33 percent projecting a decline. None of the tenants surveyed said they would seek more space to enable a lower workplace density, and just three percent anticipate leasing extra capacity to allow for additional collaborative areas once remote workers start coming back to the office.
One area where both corporate occupiers and landlords are in clear agreement is on the need to adopt technologies to handle changing requirements as the pandemic abates, with even those confident in current capabilities planning to extend their existing set-ups and/or deploy new workplace management tools. The results suggest that 83 percent of occupiers and 64 percent of landlords plan to adopt new technologies, while 77 percent of tenants and 68 percent of building owners/operators intend to expand their current solutions.
• The report confirms the scale of remote working, with 72 percent of occupiers having fewer than a quarter of their employees onsite during the crisis – and virtually all of those were deemed essential workers;
• Remote working has grown in acceptance, with roughly a third more companies expecting to allow remote working (89 percent) after the pandemic than before (66 percent) – a 23-point uptick;
• More remote working will mean different office set-ups for many employees, with 54 percent of occupiers either converting to or expanding their use of hot-desking and just 20 percent keeping assigned workstations;
• The impact of these changes is that occupiers are altering their lease strategies, with landlords seeing their tenants: negotiating new terms (63 percent), breaking leases (50 percent), seeking shorter renewal periods (44 percent), and/or letting leases lapse (29 percent).
“Many of the findings were expected but the differences in outlook between commercial occupiers and their landlords were particularly surprising,” says Brian Zrimsek, Industry Principal, MRI Software. “The good news is that both tenants and real estate owners see the benefits of bringing the workforce back into the office. Together, they now have an opportunity to align their approaches and partner to ensure that employees work even more effectively and safely as their companies adapt to new standards, practices and configurations.”
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