Advice and Opinion

Redefining office space in a post-pandemic South Africa

Redefine's Alice Lane building in Sandton.
Redefine's Alice Lane building in Sandton.

One of the biggest questions in real estate during Covid-19 has been around office occupation as the national lockdown restrictions forced white collar workers to trade their office desks for kitchen counters and coffee tables.

Upended by the pandemic, this sector found itself in the worst stretch in decades with semi-permanent changes in the workplace now forcing a rethink of how space is used and leased.

Pre-Covid-19, working from home (WFH) was an optional benefit, mostly a perk at a manager’s discretion. One of the key public health responses to the pandemic, the hard lockdown, made remote work available to everyone, doing what years of advocacy could not do and it only went to show that work could still be done if offices remained closed.

While the pandemic accelerated the WFH trend, it has also revealed its limitations. In today’s knowledge economy, an organisation’s currency is inventiveness, culture, collaboration, skills transfer and camaraderie and a screen interface is no match or replacement for face-to-face interactions.

Pieter Strydom, Commercial Asset Manager at Redefine Properties says it is a forgone conclusion in the industry that WFH has immediate implications on occupier demand. It is however a case of different strokes for different sectors and workstreams.

For sectors like legal, consulting, architecture, and design to name just a few, the office is a vital anchor for knowledge sharing, innovation, learning, collaboration and meaningful engagement. Major corporates know they need to maintain a headquarter to attract talent and this wisdom is not lost to them. It is vital however to make the office appealing, offering an engaging work environment drawing people back to the office by choice”, he says.

Not all news for the office sector is negative. According to Redefine, the vacancy levels for its P-Grade offices reduced during the last quarter and tenants are capitalising on current market conditions to improve their existing office environments from a cost, quality, efficiency, and amenities perspective. This consolidation while driving demand in P-grade assets, is also forcing a growth in secondary asset vacancies.  

This upward migration has opened up secondary space ripe for repurposing for alternative uses such as co-working, storage, education, residential and other amenities. We foresee a growth in co-working in the longer term as businesses settle into the new normal of a centralised head office and remote working from co-working spaces and home environments,” adds Strydom.   

Opening a second office might not have made sense historically, but with work life balance a bigger priority for the younger generation entering the workforce, it makes sense to be closer to talent pools. Moreover, these co-working offices will directly benefit retail and residential markets, a win-win for the sector.”  

Empty offices in markets like Singapore and South Korea have attracted the eye of their governments who have expressed interest in converting commercial real estate into housing. Redefine has no such plans at present confirms Strydom who believes that the REIT is well diversified with office, retail, and industrial holdings.  

While remote working is here to stay, the consequences of working from ‘home alone’ will sooner than later be reflected in the diminishing work culture, inhibiting innovation, and hampering collaboration. Many will still yearn for a place to connect in person and co-working spaces are uniquely positioned to fill the void. In the South African milieu, the broader remote workforce also faces challenges from rolling blackouts and poor internet connectivity.  

Lastly, Occupational Health & Safety Act (OHSA) requirements place responsibility on companies in its capacity as the employer and with no case precedent for the purpose of compensation if an employee sustains occupational injuries while working from home, it is one of the grey areas which many corporates have not really addressed.  

Like the virus has mutated, the sentiment towards working from home might too. While some will be eager to return to the offices, some others might revel in the social isolation of working from home. There is little doubt that the offices vacated at the end of March 2020 will not be the offices people will return to” concludes Strydom.