Skanska and Business Link report: 5 trends and 4 models. The new normal of the office market

Press release 4/7/2021 10:00 AM CET

The pandemic has forever changed the reality of how offices operate and accelerated processes that would normally take years. One of the effects of this continuing evolution is the record-breaking popularity of flexible workplace strategies combining the top advantages of traditional and flexible spaces. According to experts from both Skanska commercial development business unit in CEE and Business Link, this model will play a key role in the office market in Poland and Europe in the coming years.

Business Link High5ive

Recent months have almost completely reshaped the real property market. Due to the existing restrictions and sanitary regimes, the office market has been affected the most, as both tenants and clients have had to redefine their respective strategies related to the efficient use of spaces.

In order to summarize and highlight the role of the changes that are taking place, Skanska commercial development business unit in CEE and the flex space operator Business Link have jointly developed the report, “Workplace Flexibility Vademecum. Our vademecum has been created in order to organize the key changes that have recently taken place in the office market. In the report, we have focused on the extensive presentation of flexible workplace strategies through which large corporations are increasingly building their office resources. We understand that buildings, or complexes with flexible spaces, have now become an important asset in investors’ portfolios, and their role will steadily increase with each passing month,explains Maciej K. Król, Acting Managing Director at Business Link.

5 trends that will change the office market

In their report, Skanska and Business Link have highlighted 5 key trends that will shape the manner and mode of operation of the office market in the near future. Therefore, the authors of “Workplace Flexibility Vademecum” have collected and analyzed voices from the industry, and then contrasted them with their own observations. 

“The first trend involves the 70/30 rule according to which companies will look for a mix of long-term and short-term commitments to secure jobs. 30% of them will serve as the so-called ‘third space’ – the space between the office and home,says Maciej K. Król. The next point in the report demonstrates that it is wrong to write off physical offices. Despite initial claims that the mass movement of workers to home offices would significantly weaken the demand for traditional offices, the reality and studies carried out during the pandemic have shown that this scenario is unlikely to materialize. Skanska’s studies have shown that employees miss their offices and that face-to-face relationships with others are extremely important to them. Therefore, offices will remain the primary workplace, although in the future we will certainly spend slightly less time there than before the pandemic. Additionally, employees appreciate the physical aspects of the office: workplace ergonomics, spaces for group meetings, or equipment. Our survey has shown that although 64% of office workers in CEE have good conditions for working from home, as many as 50% of the respondents go to the office every day, explains Arkadiusz Rudzki, Executive Vice President for Leasing & Sales at Skanska commercial development business unit in CEE.

 The third of the described trends relates to corporate clients who, having experienced unpredictable and sudden changes, will seek greater business stability and become less willing to commit to large and long-term leases. Instead, they will opt for more flexible, cost-saving solutions. Another direction that Skanska and Business Link point to is the “clash of expectations. On one hand, tenants will try to sign shorter lease contracts for smaller spaces, but on the other, investors interested in buying buildings will still need well-secured and long-term leases. In this case, the flex model will become the optimum solution that complements an extended lease contract – to the benefit of investors, says Arkadiusz Rudzki. The last of the 5 trends refers to the “15-minute city” concept that could result in the development of smaller offices on the outskirts of cities. According to the authors of the report, hub offices will not disappear, but the number of satellite offices appearing around them will increase over time.

We will gladly return to hybrid offices

 Experts from both Skanska and Business Link stress that the growing interest in combining conventional and flex spaces results from the current huge demand for rotational work. According to studies carried out by Skanska, as many as 32% of office workers (in Poland, the Czech Republic, Hungary, and Romania) currently work in the hybrid model (combining remote work with working from the office). At the same time, as many as two-thirds of all office workers still consider offices to be safe places to work.

“Although the pace of the changes is faster than we could have imagined, the increased interest in the flexible workplace strategies model comes as no surprise. At Skanska and Business Link, we have long recognized the huge potential of the synergy between developers and flex operators. Therefore, for the last four years, we have been offering corporate clients models that are tailored to their business situation and stage of corporate development, and that combine conventional offices and serviced offices. For the purpose of the vademecum, we have identified 4 models: core&flex, satellites (hub&spoke), growth, and swing. Their common feature is flexibility that enables clients to quickly modify the number of users or the size of space, states Maciej K. Król. Flex offices suitable for growing companies

The superiority of flexible workplace strategies, and of short and flexible contracts is noticeable, among others, in the case of companies that are growing very fast, particularly when tenants’ needs can change practically from one month to another. This is best backed by hard figures. In the High5ive complex in Krakow, one of the clients from the financial sector doubled its number of workstations while waiting to move to the main space, using the swing model at Business Link High5ive. The increase in demand was very rapid, but the flexible contract enabled the immediate adaptation of the product to the tenant’s current expectations. Another company, which uses spaces at the Business Link Maraton in Poznan while it is developing its business in the region, has recorded an approximately 10-fold increase in its number of workstations. Despite the huge rate of growth, the flexible space has enabled it to develop within a single facility. The best example of the growing importance of flexible workplace strategies that we can boast about is High5ive in Kraków. From the very beginning, this office building has been equipped with flexible spaces, so it has been fully occupied in record time, becoming a very attractive office solution on the map of the city. 500 workstations at our Kraków High5ive, divided into several corporations, are now a stopgap to the final destination at the traditional office, concludes Arkadiusz Rudzki.

Last updated: 8/22/2017