Firms target digital links over work space
Firms are prioritising digital connectivity
Scottish firms say they are focused more on digital connectivity rather than office or other work space as they plan their path to recovery.
The findings of a new survey suggest a city centre property is low down the list of priorities, rated important or very important in 15% of responses from 500 firms, while better internet connections rated most highly in 95% of responses.
The data, produced by the Fraser of Allander Institute for Addleshaw Goddard, points to further shifts in the dynamics of the commercial property sector which is adjusting portfolios to cope with demand for more flexible, better ventilated and, in many cases, smaller footprints.
It shows with more than a quarter of businesses (27%) expecting to permanently reduce their office space.
It defies surveys supporting home working as a contributor to shared ideas and greater productivity. According to this research, nearly two-thirds (61%) say that home working has had an impact on workplace innovation and culture, and nearly half (49%) say it has had an impact on productivity.
To counter this, 42% of organisations have invested in new technology to aid productivity in the last year. Virtually the same proportion (41%) say that flexible and collaborative space will be key to their new physical place of work.
Nearly three-quarters of those surveyed (73%) said the cost of space would determine future location decisions, as businesses look to strengthen their balance sheets or build capital reserves as the economy recovers.
Alison Newton, partner and co-head of real estate at Addleshaw Goddard, said: “Activity in the real estate sector is busy in terms of businesses looking at where they want to be, and the type of space they want to work in. We have also been working with a number of investors active in the Scottish market.
“Organisations, while experiencing some real challenges, also have the opportunity to reflect not just on their day-to-day working practices, but also the space they want to occupy so that productivity, staff health and wellbeing, and sustainability, are built into their businesses.
“While some businesses will say that they want to reduce the amount of space they occupy, it may in fact be a change to the balance and style of use of the space which is needed, rather than the extent of the footprint.
“The survey results illustrate the dilemma in that businesses say productivity has been impacted by working from home but are not sold on a clear return to the workspace (existing or newly featured).
“There is a real balance to be struck in terms of engaging with staff to understand how and where they want to work, and the commercial or operational needs of the organisation. There are a number of landlords starting to work with new tenants to help provide a platform for that balance.”
The majority of firms questioned as part of the same survey expect to operate between 76% to 100% of normal capacity over the next six months. A quarter of businesses surveyed expect strong or very strong growth in the coming 12 months, compared to only 8% who felt the same in the previous quarter.