Preparing office precincts for post pandemic.

The space controlled by large landlords each represent billions of dollars. That value, traditionally perceived as inherent, is under threat. It is vital that they woo back workers into their tenancies.

Landlords are rightly focussing on the immediate consequence of Covid-19; the impact of rent rebates and deferrals on cashflow and the effect of uncertainty on leasing pipelines and asset valuations. But shortly, attention will critically need to turn to how to best position assets to better meet a changing market.

The gap between what commercial landlords provide and what occupiers need and want is widening. The gap applies to all landlords, even those that may see themselves at the forefront of customer-orientated service delivery.

What landlords - and their investors and lenders - are willing to give the customer must change proportionately to the upheaval occupiers are facing.

It might take some doing. The first three weeks of lockdown saw many inefficiencies, but sustained remote work is, for the most part, showing to be more effective than many of us imagined.  Even the most traditional employers have adapted their management practices and equipped their people to communicate effectively and access servers.   

Bringing workers back is going to take a lot more than sanitisation, lift-use protocol, and social distancing measures at entries and eateries. Many will feel they are giving something up by going back to the office. Remember, we have now crossed the threshold of the 66 days average to create new habits and new norms.

 If workers are not wooed back to pre-pandemic numbers, employers would justifiably review their real estate consumption strategy.

Landlords need to be setting up multi-disciplined, agile-minded teams comprising employees and advisors to develop a strategic framework and tactical roadmap of agile minded groups tasked with responding to two clear questions

1.     What are our customers’ post-pandemic needs

2.     What part can we play in meeting those needs

 The answers will make some seasoned fund managers and investment managers very uncomfortable – but, in the medium term, the alternative could well be much more painful.