The future of office spaces: What’s next in 2023?

As we look ahead to 2023, the office sector is expected to undergo significant changes driven by key trends. The office sector has experienced a rapid evolution; in particular, the growing demand for flexible office space. This is due in part to the increased adoption of remote working and hybrid work models, which have resulted in a greater need for flexible, adaptable office spaces that can accommodate the changing needs of businesses and their employees. Additionally, businesses are increasingly turning to flexible office space providers to help them optimise their use of space and reduce costs. All this will be done against a backdrop of a growing ESG focus, ensuring that business efficiency will not come at the Earth’s expense. How office design can meet an unyielding demand for flexibility The events of the pandemic have caused substantial disruption to the office space sector. Having now emerged into a ‘new world of work’, an ever-increasing number of businesses are now finding themselves entering the flexible office space market. As businesses navigate new working styles, the need to update office space design is becoming increasingly apparent; with over 74% of organisations surveyed implementing or planning to implement hybrid working, providing an optimised space for employees can encourage them to make the commute. Having enjoyed the comforts of working from home for over two years, employees are increasingly seeking similar comforts when in the office. Updated design to include more quiet and private spaces while also having separate spaces that facilitate creativity and collaboration can provide staff with a set up that allows them to enjoy the benefits they’ve experienced working remotely and bring them into the office. With the right design and balance of facilities, office space providers can help positively impact the office-working experience, which will play a greater focus in 2023. In particular, service-enhanced multi-occupancy buildings (SEMOBs) like the ones Office Space in Town provides grants workers access to a variety of third-party services in the same building as their workplace. From staples such as gyms to cafes, to unique offerings such as onsite GPs and laundry rooms meets post-pandemic needs to entice people back into the office and encourage client longevity. Building a greener future The shift towards more ESG-friendly office spaces will have a primary impact on the design and amenities of office spaces. Features such as natural light, green spaces, and bike storage will become more important, as will technologies that promote energy efficiency, such as LED lighting, smart building controls, and HVAC systems. In addition, many companies will also look to use sustainable materials, promote recycling and waste reduction, and support local communities through social programs and initiatives. Changing tax policies, client expectations, and growing awareness of environmental and social issues have forced office providers to adapt their buildings and their approaches to ensure compliance with developing ESG requirements. The need to act on sustainability will become more urgent in the new year. New mandatory disclosure requirements aimed at reaching net-zero by 2050 will accelerate sustainability action across the office space sector. While CRE providers will need to respond to both regulators and stakeholders, managing expectations comes relatively new to many companies, with only 12% being prepared to implement changes to meet requirements. With more established quantitative valuations of sustainability features, office space providers should give more attention to learning about regulatory changes and adopt practices to comply with new requirements. More stringent records of sustainability data will also be increasingly integrated into asset valuations, giving office space providers greater accuracy when measuring how green features can protect against value depreciation or insulate assets from transition risks. It is clear that complying with ESG standards will not just bring benefit to the planet, but to office space providers as well. Given the fact that over 80% of London offices risk being unlettable in 2030 due to non-compliance with new ESG standards, a greater uptick in installing green features will be seen in 2023 and beyond. A winding road ahead Megatrends such as record inflation and permanent shifts in working styles can push and pull office space occupancy fundamentals in all directions. Looking to 2023 and beyond, providers face an increasing pressure to improve operational efficiencies in order to remain ahead of the curve. While the future remains unclear, one thing is for certain: operating with a ‘business as usual’ approach will no longer work. Office space providers need to make plans to meet the needs of their tenants, investors and regulators alike. Byline: Niki Fuchs, Co-Founder and CEO of Office Space in Town

The future of office spaces: What’s next in 2023?

All this will be done against a backdrop of a growing ESG focus, ensuring that business efficiency will not come at the Earth’s expense.

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