PIE Expert View

EXPERT VIEW   Offices 2020: revealing the future of offices for investors and developers By Chris Staveley, Head of European Office Capital Markets, Jones Lang LaSalle

What will an office look like in 2020? Where will it be? How will it be funded? How old will an ‘old’ building be? These are just some of the big questions that Jones Lang LaSalle is posing and answering in Offices 2020 – a definitive and ongoing study of the rapidly-developing office market across EMEA. Launched in October 2011, the Offices 2020 initiative is in the form of a 12-month programme that addresses the industry’s most significant issues and aims to help investors, developers and occupiers to better understand and strategise for future trends and changes within the offices sector.

The issues, which we cover in 10 phased outputs, have been identified to us by clients and industry experts as those most critical over the next decade. They include sustainability, location, asset management, building obsolescence, technology, working practices, fit-out and finance.

As Benoît du Passage explains, “it’s no secret that office environments are changing en masse. But the speed of change is rapid, and the range of considerations that clients need to account for is vast. We have developed this programme to help business leaders cut through the noise and make the right decisions now so they are prepared for the next decade of change.”

Our research findings include:

• 83% of real-estate professionals think sustainability is the most pressing issue facing office real estate now and across the next 10 years;
• A combination of sustainability, technology, workplace practice, and occupier preference will fundamentally increase obsolescence and necessitate a huge requirement for refurbishment;
• Future technological developments – such as cloud computing or new electrical technology - will have a significant impact on fit out and space requirement, but not to the extent that some think.
• Funding and finance will remain constrained and creative partnerships and alternative funding sources will be increasingly required, but will it be enough to fill the funding gap?
• 80% of real estate executives currently believe occupiers will become more powerful. Landlords, developers and investors will have to meet their increasingly detailed demands for accommodation and lease flexibility.

A key feature of the programme is that it engages with clients and real estate players, and acts as a sharing forum on the very different interests, challenges and ideas of numerous stakeholders, not only through vehicles such as blogs, Twitter, LinkedIn but also more directly through workshops, seminars and industry briefings.

The offices sector has witnessed dramatic change over the last decade. Yet over the next 10 years the groundswell of change will be even more powerful, with the clear impacts of economic turbulence, business globalisation, technology advances, and environmental and energy concerns taking effect. By 2020 we believe that offices will be as important as they are today but in very different ways, but whether they strive or survive will depend on how the industry anticipates, responds and adapts to what lies ahead.

Chris Stavely can be reached at Chris.Staveley@eu.jll.com.

This guest column was co-authored by Benoît du Passage, Head of EMEA Office Agency (Benoit.Dupassage@eu.jll.com), and Bill Page, Head of EMEA Office Research and Offices 2020 Programme (Bill.Page@eu.jll.com).