Do We Still Need Offices For Work?

Increasingly so, more and more people are working from home.

We can attribute this to the increasing number of freelancers in today’s economy – where the allure of entrepreneurship is more appealing than ever. But asides, we are also seeing more and more companies – start-ups to the large MNCs, offering a work-from-home option to their staff.

This will not be made possible without the rise of technology.

Technology has provided the means to facilitate interactions amongst colleagues and clients like never before. Skype calls, JIRA project items, Trello boards, Slack communication, etc. These tools have become common place and more and more new tools are emerging.

Just recently too on 12th Feb 2020 – the coronavirus COVID-19 was detected to infect a DBS staff at the Marina Bay Financial Centre area in Singapore. As such, 300 employees are evacuated from the offices as a precaution and instructed to work from home or other sites. Bank operations have not ceased and technology has enabled work to still continue.

This begs the question – Do we still need offices for work?

In Singapore, we have seen less demand of office spaces in the CBD. The 10 year average vacancy rate was at 6.2%, though we have seen improvements in 2018 – 5.4% and 2019 – 3.4%. This has been achieved with a reduced supply of offices, and it has resulted in a drop of rental rates as bargaining power starts to go to the tenants.

We can also see this reduced demand in the CBD as a result of the decentralisation efforts by the Government. Offices are now placed country-wide to ease transport for workers and there is no longer a main concentration of offices solely in the CBD area.

Island-wide, there is a drop in the vacancy rate from 12.1 per cent as at the end of 2018 to 10.5 per cent at the end of 2019. This could very well mean there is still an underlying demand for office space in Singapore; just more spread out across Singapore.

However, a figure of 10.5% is still sizeable – and with the rise of technology, will this figure improve in the future?

How should we expect offices to evolve along with technology then?

Understandably, the traditional offices will have to transform to meet future needs and working methods. Very much similar to the retail industry in relation to e-commerce, there is a need to transform for offices as well.

According to a CBRE report – office spaces are expected to transform to meet the needs of tomorrow

This is an idea of how offices can change. With transformation – will it then drive greater demand or relevancy for office spaces?

Co-working spaces have been a good example of office space innovation. There are many co-working companies out there – WeWork, JustCo, Spaces, The Working Capitol are some examples.

By providing value to MORE tenants – freelancers to large corporates, with personalised service offerings, hassle-free experiences, competitive pricing and events; Co-working companies have reworked the relationship between landlords and tenants to their advantage.

I won’t go into great details on the mechanisms of co-working spaces, but this shows the innovation in office space which has shown relevant value for their tenants.

So, back to the main question: Do we still need offices for work?

In my opinion – Yes.

The fall in vacancy rates in 2018 and 2019 shows that Singapore still demands office spaces. There might also be industry requirements which dictates the need for office space.

However, in light of technology advancement, there is a need to illustrate greater / different value of offices to workers. The demographics of an office tenant has also evolved, and freelancers can very much be a potential tenant to landlords who typically rent out only to premium tenants or big corporates.

Businesses, at heart, has always been a people thing. To make things work – there is a need to collaborate closely among workers. While technology has provided a way to do so without meeting face-to-face; there are still aspects of businesses which may still be better off with face-to-face interaction – like sales service, brainstorming of ideas and solving critical issues.

Technology has always just been a tool to facilitate processes better, but it can never, in my opinion, replace human to human interaction.

If greater innovation and value can be employed to office spaces; I would say not only do we still need offices for work – We may need even more of it.

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