How hybrid work trends are shaping future sustainable workplaces
/ EdgeProp Singapore |
Couse: The next three years will prove to be an inflection point for real estate (Picture: Samuel Isaac Chua/The Edge Singapore)
SINGAPORE (EDGEPROP) - In the aftermath of the pandemic, employees are prioritising flexible working arrangements. Last month, findings released from a survey conducted by human resource (HR) services provider Randstad Singapore highlighted that over 40% of Singapore workers would not accept a job if they are unable to work from home or if the job does not allow flexible work hours.
The clear shift in employee attitude underpins the fact that hybrid work is here to stay — a factor that is prompting more organisations to rethink their office spaces. “The next three years will prove to be an inflection point for real estate, as the changes accelerated by the pandemic represent an opportunity to pause, think about long-term real estate strategy and how it aligns with future business priorities,” notes Anthony Couse, CEO, Asia Pacific, at JLL.
JLL’s Future of Work Survey 2022, which polled corporate real estate (CRE) executives globally, found that 56% of its Asia Pacific (Apac) respondents said they will make remote working available to all employees by 2025. Speaking at a media briefing on Aug 18, Couse highlights that there are many approaches when it comes to hybrid work arrangements, depending on various factors such as the organisation’s size, business sector, work culture, country of operations, and more. “Everybody translates hybrid differently,” he says.
Couse: 56% of organisations in Apac will make remote working available to all employees by 2025 (Picture: Samuel Isaac Chua/The Edge Singapore)
Nonetheless, it is apparent that organisations need to transform their workplace to accommodate flexible work arrangements, which Couse says has become a crucial tool in the war for talent and as part of diversity, equity and inclusion strategies. The role of the office While hybrid models are critical, they are not without limitations. A March 2022 survey conducted by JLL among Apac HR decision-makers showed that 67% of managers surveyed find it more challenging to manage a hybrid workforce.
A key concern relates to career development, especially for junior employees or those just starting out their careers. “Sixty percent of HR leaders believe that the office is the primary place to develop your career and to learn. You can’t do that off-site,” Couse explains. Another factor relates to organisational culture, which is harder to cultivate without employees having face-to-face interactions in the office.
In addition, the survey found that hybrid work is pushing companies to find new ways to foster collaboration through the use of technology as well as providing spaces that support teamworking.
To that end, Couse emphasises that the workplace remains an important component of organisations. “Seventy-seven percent of CRE professionals agree that the office will remain central to the company’s long-term ecosystem,” he says.
Contrary to perceptions that organisations are downsizing office space in response to shifts towards flexible work arrangements, Couse argues that leasing data in Apac shows a steady demand for office space. Despite a challenging macroeconomic environment, Apac recorded a net absorption in office space of around four million sq m (43 million sq ft) in 2021, nearly consistent with the 10-year running average for the region. “It’s strong evidence to say the office is still very, very relevant because people are absorbing more space,” he says.
In addition to this demand, organisations are looking at redefining the workplace to better reflect the new dynamics in a post-pandemic environment. In its survey of Apac HR leaders, JLL found that 56% of respondents said they plan to refit or redesign the office space in the coming 12 months, with the workplace envisioned as a space for collaboration, face-to-face meetings, and fostering creativity and innovation.
Shifting to green buildings
Another catalyst for redefining workplaces is the growing expectation around environmental, social and governance (ESG) and sustainability. Developed nations around the world such as Japan, Canada and the US have set targets to achieve net zero carbon emissions by 2050. In Singapore, the National Climate Change Secretariat announced on Sept 5 that it was also mulling a 2050 net zero goalpost. Meanwhile, private-sector organisations around the globe have started drawing up net zero carbon emission plans.
Kamya Miglani, JLL’s head of ESG research, Asia Pacific, highlights that decarbonising the built environment is a crucial component to achieving net zero carbon targets. Citing JLL’s Decarbonizing Cities and Real Estate report released in May, she highlights that a study of 32 key cities worldwide found that buildings account for some 60% of overall emissions. In Singapore, which has a larger proportion of newer buildings, the built environment accounts for around 40% of carbon emissions.
Given the importance of the built environment in the net zero journey, corporates are now looking for ways to achieve a green real estate portfolio, including occupying green-certified buildings, says Miglani. JLL’s Future of Work survey found that seven in 10 companies in Apac are willing to pay a rental premium to occupy buildings with green credentials.
Miglani: Decarbonising the built environment is a crucial component to achieving net zero carbon targets (Picture: Samuel Isaac Chua/The Edge Singapore)
The demand for green-certified buildings far outstrips supply, especially in established cities where approximately 80% of the building stock that will be standing in 2050 had already been built. As such, Miglani highlights that retrofitting existing buildings will be vital for achieving a sufficient supply of green buildings. To meet net zero targets by 2050, the current pace of retrofitting legacy buildings will have to exceed 3% per year, higher than the current rate of around 1% to 2%.
Another green strategy that Miglani believes will gain traction is green leases, which refer to lease agreements between landlords and tenants that contain clauses that set out environmental objectives on how the building is to be managed or occupied in a sustainable manner. Over 80% of CRE professionals surveyed by JLL in Apac view green leases as “a game-changer in making real estate future-proof”, with 30% having already signed a new green lease.
But Miglani notes that green leases require the right tools and infrastructure to capture data that can accurately track whether the sustainable requirements are met. “Again, that’s where the point of retrofitting buildings comes into the picture,” she comments. Ultimately, Miglani highlights that organisations that opt for green real estate strategies are futureproofing their business. “A sustainable office will not only contribute to [net zero carbon targets], but also meet employee needs in a dynamic, hybrid environment,” she says.
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