Hybrid work is changing the ‘landscape’ of real estate – What global research reveals

The next two years will be critical for the real estate industry, according to a study of 1,000 real estate companies worldwide, with hybrid work taking center stage.

With the number of flexible office spaces globally set to double by 2026, now is a critical time for realtors and property owners to market properties that are suited to hybrid working.

That’s the key message emerging from Jones Lang LaSalle’s (JLL) Future of Work 2022 research alongside research from IWG and other companies.

It all makes for interesting reading for real estate brokers, decision makers and landlords as to which properties will fuel the growing demand for flexible spaces.

Employees want flexibility

At a time when the legislative agenda for hybrid working across Europe is high on the agenda, research from various organizations shows that hybrid working is here to stay.

In JLL’s research, 1,095 senior decision makers in the real estate industry were surveyed in countries around the world, from the UK to Hong Kong and Australia to Brazil.

Its findings paint a compelling picture of the state of hybrid work over the next two years, with 53% of respondents planning to make hybrid work permanently available to all workers by 2025.

Employees want flexibility, and forward-thinking employers understand this. Indeed, 77% of JLL survey respondents agree that offering hybrid work will be critical to attracting and retaining talent, while the same percentage predict that workers will be calling for a change in working model by 2025.

This aligns with IWG research findings, in particular that 77% of workers say a base closer to home is an important advantage they will consider when looking for work in the future.

JLL’s research is just the latest to highlight the fact that employees are happier with the hybrid work model. Last year, PwC’s study on remote working found that 87% of employees prefer this way of working. In the IWG survey, about half of all workers went even further, saying they would look for another job if they were asked to return to the office five days a week.

Work “hot spots” in the suburbs

One thing that is clear from JLL’s research is that ESG criteria will be an important factor, with 74% saying they are likely to pay a premium for environmentally friendly office space and 56% doing so by 2025. No wonder, given that sustainability has become crucial to business credibility.

Part of being more sustainable is, of course, reducing commute times, and that means office space needs to be closer to workers’ homes. IWG workplaces outside of city centers have grown during the pandemic, with outlying areas emerging as employment hot spots. In the past two years, almost all new IWG centers have opened in non-urban settings and areas away from major urban areas.

For real estate brokers, landlords and decision-makers, the bottom line, it says, is clear: thinking about what’s good for the planet isn’t just good for the planet.

Going “green” goes hand-in-hand with hybrid, given the reduced commute times and lower overhead already associated with flexible office spaces located in employee communities. This is consistent with the findings of a 2020 IWG survey in which 92% of respondents want a greener, more sustainable way of working with a reduced need for unnecessary travel.

Cooperation is the point

Collaboration is one of the key findings highlighted in JLL’s research. The workplaces of the future place more emphasis on collaboration, with dedicated office spaces a thing of the past in favor of open work environments for 73% of respondents.

With workers less in the office under a hybrid work model, the times they go to a shared workspace now look different, with a greater emphasis on teamwork that they may feel is missing when working from home.

RES-EMP

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