The ongoing COVID-19 pandemic has caused a great deal of disruption and uncertainty in the world of commercial real estate, just as it has every aspect of work and life in general. However, the UK Government’s roadmap to ease lockdown restrictions, coupled with the pace of the ongoing vaccination rollout, and the recently announced UK Budget represent an end in sight regarding the COVID-19 pandemic.
Companies globally have had to rethink and reframe their strategic plans to suit the ‘new normal’ we will all find ourselves in. Recently announced financial measures in the UK, such as the increase in Corporation Tax from 2023 and the extension of the Coronavirus Job Retention scheme (furlough), are measures that organisations should keep in mind as they assess their commercial real estate portfolios, both now and in the coming months. The announcement on new visas, especially for the technology sector, should also be considered in terms of how they may impact future recruitment, and as a result, office space requirements.
Looking ahead
Every business can view this as an opportunity to seize this moment and implement the learnings from COVID-19. Organisations should analyse their present and future business objectives, considering recent measures outlined by UK Chancellor, and set about building and delivering a real estate strategy that supports, rather than inhibits, their wider business goals and objectives.
Here at DeVono, our ‘Commercial Real Estate Roadmap’ is a handbook to help all businesses devise their future commercial real estate strategy, both during and after the COVID-19 pandemic. In the handbook, we outline how business leaders should approach commercial real estate decisions using our ‘Return, Revitalise and Transform’ model. This document factors in the UK Government’s roadmap to ease lockdown restrictions, the vaccination rollout, and the various measures introduced in this year’s 2021 Budget.
The future of work and returning to the office
The purpose and function of a workplace have been greatly challenged by the COVID-19 pandemic, forcing businesses to adapt to new ways of working. A well-considered commercial real estate strategy that heeds a ‘COVID-19 secure’ re-entry to the office, while prioritising employee safety, productivity, and wellbeing, will be vital in adjusting to the ‘new normal.’ With vaccinations being deployed, it’s now time to start focusing on your COVID-19 ‘return-to-work’ plan so that your business is ready for the next chapter post-pandemic.
At DeVono, we have worked hard to help our clients overcome a huge variety of challenges throughout the pandemic. Our team has advised clients on short-term rent mitigations, carried out risk assessments, and crafted holistic real estate strategies.
Adjusting to a New Reality
The initial and immediate stage of our ‘Commercial Real Estate Roadmap’ involves examining how to return safely and securely to the office post-COVID-19, ensuring every employee’s wellbeing and comfort.
Any business considering a return to the office in the next few months will need effective and clear communication while keeping employee wellbeing and cash management at the forefront of all decisions.
The next three months offer businesses a unique opportunity to re-evaluate their business model. Organisations must ensure that this time is used wisely to evaluate their real estate portfolio, because an inefficient real estate footprint could be incredibly damaging for future workforce transformations. At DeVono, we use our experience to advise and support businesses to manage their adaptation to their commercial advantage.
Return-to-the-Office Assessment
Businesses should conduct a Return-to-the-Office (RTO) risk assessment to ensure a well-planned and safe return to the office in the coming months. At DeVono, we have conducted a large number of these assessments in recent months. Our main advice to firms is to communicate openly and honestly with employees as they plan their return to the physical workspace.
A constant stream of open communication will lower the risk of misinformation or confusion becoming widespread among staff. Any areas of concern that arise will need to be addressed as soon as possible as per the government’s roadmap out of lockdown to ensure high confidence levels amongst employees as we emerge from the COVID-19 restrictions.
Portfolio Assessment and Reconciliation
In light of the UK Government’s ongoing work-from-home guidance, we highly recommend that any firm with multiple premises make it a priority now to assess their existing commercial real estate portfolio before returning to the office.
Bridging the Leasing Gap
It is crucial to conduct a cost-benefit analysis if your business has a lease event (such as a break option, expiry or rent review) during the return phase, to understand the most effective next steps. This cost-benefit analysis includes the size of the space and leasing model (traditional or flexible) most suited to how a given organisation believes it can best work going forward.
We’ve learned during the COVID-19 pandemic that all businesses have had to adapt, and will continue to make strategic as well as tactical decisions that impact their property footprint over the coming months. By aligning your short to long-term goals now, you can create an office environment that is better and more productive than it was before the pandemic struck.
Our ‘Commercial Real Estate Roadmap’ is a helpful guide to help kickstart the debate, provoke internal thought development as it relates to real estate, and inform occupier decision-making. Find out more about how it can support your business.
We are here to help you and advise you on all commercial property needs. Contact us at info@devono.com or +44 (0) 20 7096 9911.
