Collaborative and flexible offices are being developed with hotel-like services and amenities focusing on tenants’ workplace satisfaction. The focus is on adding a premium to these offices and reaping benefits. And shared workplaces are leading the transformation.
Two offices located adjacent to each other may have different rents. It is possible as one building could be future-ready and the other may lack the necessary design creativity that meets the occupier’s expectations of a truly collaborative workspace.
Interesting office trends have emerged in recent times: While designers and architects are designing green pods for those who prefer working from home, ergonomically curated, biophilic office designs are increasing. However, the two trends are acting against each other – while the former promotes a hybrid work culture, the latter indicates a re-entry to offices, giving way to a more collaborative workforce. As the opposing ideas continue to thrive, there are common threads — workspaces are being designed to incorporate keeping in mind the well-being of the occupiers, and offices are getting equipped with a wide range of amenities. The impact is visible on the rent these offices demand.
The hotelisation of offices indicates the workplace transformation into a commercial space like a hotel. It treats tenants as valued guests and provides building occupants with the same quality of service as they would find in the hospitality sector.
And the hotelisation of the workspace is here to stay.
So what is changing?
The coronavirus has been a game-changer for offices. More than two years into the pandemic, working from home or remotely seems like an increasingly permanent proposition. With people wanting to increasingly work in a hybrid mode, workplace evolution has picked pace. Features like “plug and play” are offered to all. Access to a cafeteria or a cloud kitchen, tenants’ lounges, coffee bar, parking, concierge, shuttle buses, discount deals from local restaurants and shops, conference centre management, internal community events, fitness centre and wellness classes are all features of the hotelised workplace.
Ergonomically designed workplaces with biophilic features are said to enhance the connectivity of building occupants with the natural environment through direct and indirect nature and space and place conditions. The design includes an open office design, hot-desking, and coworking spaces. Hence, the evolved workplace design is an open and collaborative environment that makes people feel welcome and energized to work.
The factors behind
The way businesses approach real estate decisions is being reshaped by technological advancements, a more mobile workforce, and uncertain economic growth. Amidst the uncertainty, landlords have realized that to improve tenant retention, command better rental values and create future-ready offices, they need to take a more service-oriented role. And occupiers continue to demand more flexible lease terms, better quality in-house services and enhanced offerings for well-rounded end-user experiences.
The trend is already impacting the design of commercial real estate (CRE). First, it has pushed landlords and occupiers towards better asset management practices. As a result, landlords now focus on getting the right set of services and designing a more open and collaborative workspace.
Second, the trend has fundamentally spurred demand for quality offices. Both old and new portfolios are being developed to meet the high demand. Hence, various redevelopment projects have resurfaced, adding to Grade A supply of offices. And shared workplaces are leading this change.
The upside of hotelisation
Hotels have a unique selling proposition that businesses want to replicate, like having a 24/7 service, a consistent and standardized experience, and a host of facilities. There is more focus on creating a warm and welcoming environment by incorporating different elements like the use of natural light, nature sounds, furnishing with upholstery, and other materials that are not typical in an office environment.
Hotelisation is now a way to future-proof the existing buildings. It is helping building owners to command higher rents and remain relevant for tenants in a pandemic-like situation – a trend visible with leading shared office operators. The transformative strategy of hotelisation worked for most of these operators, who wanted to differentiate their offerings through customized service offerings.
However, office owners should exercise caution. As one replicates the services of a hotel, he must strike a balance between catering to tenants’ higher expectations and the incremental costs associated with designing, building and managing high-quality amenities. Focusing on people-oriented services might add to the overall experience. That should hold bring success in the long run.
(By Sumit Lakhani, Deputy CEO, Awfis)