Has COVID-19 killed the office?

3 minutes |

More Australians are looking for an office away from their home office.

By David Braue on Sep 03 2020 11:47 AM

Once the favoured haunts for home workers and startups, coworking spaces are reinventing themselves as COVID-safe collaboration spaces, as social distancing requirements push venue managers to find new ways of helping isolation-fatigued workers collaborate.

Online firms like Spacely, Venuemob, Halls for Hire and Spacenow – which rent spaces like private rooms, ‘flexible office’ and coworking spaces, and event halls – have seen a surge in available space as companies repurpose newly-empty offices as short-term private rentals.

A third of flexible office space comes from businesses struggling to utilise loads of empty offices while 80 per cent are “turnkey private offices”, flexible-working firm Rubberdesk found in its recent Flexible Office Market Update – which analysed COVID-19’s impact on its inventory of over 3,000 flexible offices, serving 21,000 people across 144,000 square metres of rentable space.

Far from the open-plan collaborative workspaces of yesteryear, clients are now targeting standalone office spaces where individuals can access all the comforts of the office – while maintaining safe distance from others.

Some companies are hiring large numbers of diminutive spaces to house small project teams, with fully 84 per cent of advertised flexible office space listed for fewer than 10 people and prices hovering around $650 per person per month.

Subletting in the suburbs

Analyses suggest many home workers are tiring of what was once a novelty, with many craving social interaction in office environments and fears of a mental health epidemic as home isolation becomes emotionally overwhelming.

Yet with much of Australia’s workforce now forced into home offices and others too nervous to take public transport, CBD offices are no longer the sanctuary they once were.

And with once-surging office trends like hot-desking now more a health hazard than a legitimate space-optimisation strategy, companies are reconsidering their interest in CBD-based, purpose-built co-working facilities that once spruiked the networking possibilities of meeting new people every day.

“Most of our traditional co-working stock has been in the CBD, where everything and everyone has been,” Spacenow CEO Daniel Gunning told Information Age, “but the CBD is now an absolute ghost town and everyone is now out in the suburbs at home.”

As a result, flexible-space firms are fielding enquiries from people who want to access private office space in suburban areas that would never have been considered in the past.

Businesses are “looking for safe places for their employees to work away from headquarters or home,” the Flexible Office Market Update noted.

Changing demand patterns have pushed space-rental firms to reach out to tourism-hit businesses like hotels, whose huge inventories of unrentable rooms are proving popular as short-term, self-contained individual offices.

“We’ve had to find the gaps in the market,” Gunning said, noting that Spacenow – which leases short-term access to over 5,000 spaces across major metropolitan areas – has responded to a 550 per cent surge in enquiries since March by offering hotel spaces, suburban Flexible Project Spaces that range from a full office floor to a single desk, and supporting services such as a COVID Decontamination service launched in conjunction with cleaning service marketplace Whizz.

Customers “want a controlled environment from a hygiene point of view, but many also want that feeling of sitting down, and are waiting to get back and engage with a few of their clients,” he said, noting that “offices will become more of a place where you bring people together for building culture and having interactions.”

Work is wherever your workers are

Indeed, where flexible-working spaces were once filled with entrepreneurial dreamers and avid social networkers, many companies are now elbowing in to lease distributed, digitally-connected spaces that will let several project teams work in isolation as social-distancing regulations are progressively relaxed.

Recruitment agency Real Time Australia, for one, has closed its offices in Sydney and Melbourne and is using Spacenow for all of its commercial space requirements.

Flexible, short-term office arrangements will become increasingly common, with the Flexible Office Market Update noting that “as expectations build for an easing of COVID-19 restrictions, we anticipate companies will be assessing their ‘return to office’ plans.”

“For many, there are now more options than the binary decision of working at home or headquarters… We expect organisations will recognise the value of working closer to home and examine a ‘hub and satellite’ approach.”

That could spell ongoing disaster for commercial landlords that have long relied on large-scale multi-floor commercial leases to cover their costs in building and running massive office buildings and shopping centres.

The exodus of tenants recently spawned a stoush between shopping-centre giant Scentre Group and its commercial tenants, with the operator locking out many small business operators before ultimately granting widespread rent reductions to ensure continued occupancy.

Many retailers are expected to abandon conventional leased spaces altogether, with many firms reinventing their businesses online and others doubling down on home working as a long-term – albeit somewhat controversial – alternative to costly office leases.

Read the original article here: https://ia.acs.org.au/article/2020/has-covid-19-killed-the-office-.html