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Mon 7 Sep 2020 09:22 AM

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Why hotels and malls are your new office in the post-coronavirus world

Staff may soon find themselves 'going to the office' in hotels or even shopping malls, according to experts

Why hotels and malls are your new office in the post-coronavirus world

Between 2014 and 2020, flexible office supply in Dubai more than tripled from 50,000 square metres to 160,000 square metres.

While companies continue to debate the pros and cons of employees working from home in a post-Covid world, staff may soon find themselves ‘going to the office’ in hotels or even shopping malls, according to the latest trends identified by real estate giant JLL.

The increased demand for flexible offices, and the growth in remote working, may have been trends that pre-dated the onset of the global coronavirus pandemic, but their influence has certainly been exacerbated by it.

Throw into the mix the requirements for social distancing and other restrictions and it is clear the traditional office set-up as we knew it, prior to Covid-19, could well be a thing of the past.

“On a regional scale, extensive strides have been taken by Dubai to ensure flexible workspace frameworks are fixed and maintained in line with intensified measures aimed at combating Covid-19. To meet the growing demand, there has been a rapid increase in total supply of flexible office space in the Emirate.

“Although the effort is gaining momentum, the level of flex space in Dubai remains below the EMEA average of 2.3 percent, suggesting there is room for further growth,” said Toby Hall, director - head of office and business space leasing for JLL MENA.

Flexible approach to the office environment

According to a survey by JLL of commercial real estate decision-makers of large companies across the globe, including the UAE, it was found that 67 respondents were planning to increase workplace mobility programmes, incorporating flexible space “as a central element of their agile work strategies”.

Between 2014 and 2020, flexible office supply in Dubai more than tripled from 50,000 square metres to 160,000 square metres. While, to date, the emirate is home to 40 different operators of flexible offices.

Chris Hobden, associate director, head of strategic consultancy, Chestertons, told Arabian Business: “The move by corporate occupiers towards more flexible space, coupled with the growing appeal of a ‘hub and spoke’ office model, looks set to support the inclusion of office space within alternative buildings. Hotels and retail centres, especially in locations currently lacking flexible office space, could be well placed to incorporate serviced offices as an additional revenue stream.”

Working Residence programme proving popular with Ascott

This was backed by Vincent Miccolis, Ascott The Residences’ regional GM for the Middle East, Africa, Turkey and India, who revealed that elements of their serviced apartment portfolio across the region had already been put to alternative use.

“Because we’ve got space, we’re also focusing on utilising that in different ways. Some of our apartments are being used for offices,” he said.

“We launched a programme called Working Residence because of the popularity of working-from-home. I know some people will continue with that so we launched this concept of working residences. We are adapting some apartments into office space. We are adapting some of our apartments for yoga.

“The idea was really to see the space we have and how we can use it for different options and it has been working quite well already.”

Flexible working is here to stay

Nadeem Ahmed, owner and managing director at Janat Office Fit Out, told Arabian Business that the increasing trend she was seeing was for some companies to mothball parts of their offices as they move to a hybrid physical/remote working, remodelling their space into a smaller office that is set up for smart, flexible working.

“The benefits of this are that there is less space to sanitise and they are able to make better use of space, saving on overheads such as DEWA,” she said.

“We are also finding that a lot of companies are requesting us to actually set up their senior management homes with functioning home offices, including desks, chairs, IT and conference systems.

“The fact that businesses are investing in refitting their office spaces is a strong indication that flexible working is here to stay,” she added.

Ample office stock in the market

Despite this, a recent report by KPMG revealed that Dubai’s commercial gross leasable area (GLA) is forecast to increase to 9.18 million sq m by 2021.

Prathyusha Gurrapu, head of research and advisory at Core Middle East, told Arabian Business: “In Dubai, occupancy levels have decreased across hospitality and retail sectors and we are seeing attempts by developers to re-purpose assets to suit office spaces including incorporating some element of flex-space.

“However, with office occupancy levels also dropping and ample office stock and flex-space inventory on the market, we foresee new and relocated office demand to be primarily absorbed by the office districts first rather than re-purposed assets.”

Five things we learned from this story:

  • Flexible office space is set to become more popular as companies look to cut costs in light of the coronavirus-inspired economic crisis
  • Between 2014 and 2020, flexible office supply in Dubai more than tripled from 50,000 square metres to 160,000 square metres
  • Hotels and retail centres could be well placed to incorporate serviced offices as an additional revenue stream
  • Working from home is here to stay as businesses look for a hybrid solution between physical and remote working
  • Dubai’s commercial gross leasable area (GLA) is forecast to increase to 9.18 million sq m by 2021

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