The hybrid work revolution is transforming the commercial property landscape
The global pandemic accelerated the emerging adoption of remote work and flexi hours, ushering in a new era of hybrid work models that are reshaping not only the workplace and traditional office model but also where we live, shop and socialise.
“As companies reassess their office needs and employees seek greater flexibility, the landscape of workspaces, communities and retail experiences is undergoing a profound transformation,” says Cobus Odendaal, CEO of Lew Geffen Sotheby’s International Realty in Johannesburg and Randburg.
“According to recent research conducted in nine US cities, it’s anticipated that the demand for office space in 2030 could be 13% lower than pre-pandemic projections and, as a result, real estate values in this sector are expected to decline significantly, with estimates ranging from 26% to 42%, depending on numerous factors – including location.
“Moreover, the rise of remote work is expected to drive demand for alternative workspace solutions such as co-working spaces and flexible office arrangements. These shared workspaces offer cost-effective options for companies looking to provide employees with access to amenities and networking opportunities without the commitment of a long-term lease. Individuals and small teams are renting ‘hot desks’ within shared working spaces as they offer flexibility, enabling them to work when and where you want.”
He says a similar scenario is expected in South Africa, with one of the key implications of this shift being a potential oversupply of office space in urban centres, particularly in major cities like Johannesburg, Cape Town and Durban. “With fewer employees commuting to centralised office locations on a daily basis, companies may reassess their office needs and downsize their footprint, leading to vacancies and downward pressure on rental prices.
“Hybrid working is also spurring decentralisation, with many businesses already having moved their offices to smaller commercial hubs nearer to residential areas – and, in many urban cores where office buildings once thrived, there is already a growing surplus of vacant space. This presents both challenges and opportunities for repurposing these structures into mixed-use developments that combine office space with residential, retail and recreational amenities.”
Conversely, suburban and rural areas are experiencing a resurgence as remote workers seek out larger homes with dedicated home offices and access to green spaces. “This trend is fuelling demand for housing in suburban communities and driving up property values in previously overlooked areas. In Johannesburg, there is growing demand for homes in secure lifestyle estates on the outskirts of suburbia; ones that offer a country lifestyle while still in close proximity to amenities like schools,” says Odendaal.
Moreover, the shift to hybrid work models is transforming the way we shop and socialise. “With fewer people commuting to centralised office locations, the demand for traditional retail space in these centres is waning. Instead, retail is becoming more experiential, focusing on fostering community experiences and providing unique offerings that cannot be replicated online.
“Smaller community shopping centres are still thriving, but local businesses are now reimagining their storefronts as gathering places for where customers can attend events and connect with their communities. Pop-up markets, food halls and outdoor dining spaces are becoming staples of urban and suburban landscapes, revitalising neighbourhoods and creating vibrant hubs of activity.”
He says that the rise of remote work is also beginning to blur the lines between work and leisure, prompting the development of co-working spaces that cater to both professional and social needs. “These flexible workspaces offer amenities such as coffee bars, lounges and networking events, fostering collaboration and camaraderie among remote workers.”
As the hybrid work model becomes the new norm, it is imperative that stakeholders across industries adapt to these seismic shifts in the way we work, live, shop and socialise. “Urban planners, developers and policymakers must work together to repurpose existing infrastructure, revitalise urban centres and create sustainable communities that meet the evolving needs of residents and businesses alike.
“The hybrid work revolution is driving innovation and transformation across multiple sectors, and by embracing these changes and fostering collaboration, we can build more resilient, inclusive and dynamic places to work, live, shop and socialide in the years to come,” concludes Odendaal.
Image credit: Freepik
