Companies may shift towards core-and-flex office models
Agile work strategies and the need to reconfigure office space in real time could see many companies move towards “core-and-flex” office models, where businesses retain the majority of their real estate on long leases, but hold a substantial minority on flexible, short-term rental agreements.
Nuveen Real Estate says that rather than sounding the death knell for the office sector, the COVID-19 crisis may instead act as the catalyst to significantly alter how firms occupy offices. Work areas may, in the short-term, move away from collaboration and break-out spaces as social distancing measures remain in place across Europe. But Nuveen believes that community workspaces have become central to many companies’ recruitment and retention strategies and will remain so once the crisis abates. This could mean that head offices focus more on higher-value activities that foster cooperation and innovation, leading to a need for increased floor space per worker.
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