Why businesses are reconsidering office space in 2024

A Shift in direction

Momentum is now shifting back towards office work, with several high-profile companies including Amazon, Boots and Rockstar Games mandating full-time attendance. The majority of CEOs think the future is in the office, with 64% believing that most of their workers will be present and correct by 2026.*

It’s clear that this transition is not simply a reaction to the challenges of managing remote teams – but a strategic shift to leverage the benefits of the country’s leading office space sector. This week’s blog delves into what’s driving business leaders to embrace a new era of in-person office work.

Valuing face-to-face interactions

At its core, the return to office is motivated by the philosophy that physical proximity amplifies collaboration, creativity and company culture. Although virtual meetings have become a mainstay in all business operations – they simply cannot replicate the spontaneous, organic “water cooler moments” that occur in a shared space.

Remember when you first started out in your industry? How intrinsic was the office environment to your professional development? Witnessing senior colleagues work in real time, participating in impromptu brainstorming sessions and gaining new perspectives from the office melting pot is essential in accelerating professional and personal growth.

… To deliver the absolute best for customers and the business, we’ve decided that we’re going to return to being in the office the way we were before the onset of COVID.

Andy Jassy, Amazon CEO

Security and operational efficiency

From an operational perspective, there are key challenges linked with remote work; the most glaring of which is associated with work security. Even if your staff are using company hardware, there are always concerns regarding home networks – and for employees tasked with handling sensitive data, a breach may have devastating consequences.

With this in mind, it’s clear to see why leading tech brands like Amazon and Rockstar have mandated a return to office. Having your entire workforce operate in a controlled environment helps maintain data integrity and compliance – from an IT perspective, it also streamlines operations, reducing costs and minimising the duplication of resources across multiple locations.

Reinventing the office

As easy it is to reminisce about the retrospective wonders of the office environment, it would be unfair not to address the flaws. For many, years of separation from tradition have highlighted limitations presented by the classic model – hence why it’s important that companies intent on bringing their staff back into the workplace contemporise their office environment.

Physical interaction is indeed important, but firms need to make a decisive argument for the office by modernising their space and ensuring that they not only accommodate – but also enhance the way people work. Now is the time to shift from traditional layouts to more flexible, dynamic spaces that encourage collaboration and creativity. This might include open-plan areas for team projects, quiet zones for focused work and state-of-the-art meeting rooms equipped with the latest technology.

Targetfollow

At Targetfollow, we see this trend as a prime opportunity to invest in and develop office spaces that cater to the needs of businesses and the evolving expectations of employees. By embracing modernity and designing environments with the staff experience in mind – companies can attract and retain top talent, ultimately driving business success.

For residential landlords, the commercial office sector presents an attractive alternative. With changes in the residential property landscape, including more stringent regulations, increased Capital Gains Tax (CGT) and new rules around renting and Houses in Multiple Occupation (HMO), many are seeking better returns and yields in the commercial space. The office sector not only offers potential for strong returns but also benefits from more favourable rates on construction finance, making it a compelling option.

The return to the office is more than a simple shift in where people work; it’s a reimagining of how they work. For companies and employees alike, a thoughtfully designed office can be a catalyst for productivity, innovation and growth. For investors in the office sector – it represents a significant opportunity to support this transformation while delivering strong returns.

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*KPMG survey, 2024