Sometimes working from home can be challenging. Offices as places of work are still in demand.
The pandemic is affecting the office real estate market – but how? The topic of working from home and changing workplace concepts is often the focus of discussions. Other factors weigh more heavily.
The mood in the market for office properties is ambivalent: on the one hand, the fundamental data in the major markets continue to show a largely robust picture, on the other hand, the discussion about the effects of home office and mobile working continues to unsettle many players. bulwiengesa has been calling for a differentiated approach since the beginning of the pandemic and this is confirmed by the current market development: only a small number of areas are given back.
The framework conditions for offices have not changed as much as the Corona crisis would have suggested, especially in the metropolises. Office employment is an important influencing factor. After this recorded a very slight decline in the past crisis year, a positive development has already set in again in 2021, which is likely to gain momentum in 2022. The strongest increase of around 9% (2020 to 2025) is expected in Berlin. Munster (7.4%), Cologne (6.7%) and Leipzig (6%) follow. This results in positive demand effects. On the other hand, there is a second important influencing factor: construction activity. In Berlin alone, there are currently almost two million square meters of office space under construction or renovation, which corresponds to around 10% of the total stock. Compared to the capital, less is being built in the other major office markets. The vacancy rate resulting from the relationship between supply and demand will remain at a healthy level in the coming years. A slight increase in the vacancy rate towards 4.5% is forecast for the seven major A cities – Berlin, Hamburg, Munich, Frankfurt, Düsseldorf, Cologne and Stuttgart. The vacancy rate will also rise slightly in the B cities, where both a lower increase in office employment and less construction activity are expected. Overall, however, vacancies are assumed to be within the range of the usual fluctuation reserve.
Office space concepts to feel good
However, even after almost two years of working from home due to the pandemic, there is still no clear insight into how much home working is affecting demand. The current argumentation by companies in favor of working from home is also very much based on a one-sided discussion of costs that ignores the expenses for working from home; In addition, the gray areas under labor law – between the classification of mobile work and home office – are unlikely to last in the long term.
Companies are preparing for part of the future work to be done in the home office. If, depending on the industry and feasibility, office workers do not work from the office for an average of around two days, this will not necessarily reduce the overall use of space.
However, the Corona crisis is influencing office concepts: Before the crisis, much attention was paid to the topics of efficiency and workplace density, but now the focus is more on the employees. This means that the new workplace concepts see the office both as a place of work and as a meeting place where employees feel comfortable and can exchange ideas creatively. The workplace arrangement is looser, ancillary and common areas are becoming more important.
Note: The article first appeared in the February issue of the VBKI Spiegel.
Contact: Sven Carstensen, Board Member at bulwiengesa, carstensen@bulwiengesa.de