The Office is Here to Stay

The first Covid-19 case in Indonesia was recorded in early March and by the middle of the month, government restrictions were put in place and many businesses implemented work from home policies. By early June, workplaces began to re-open at limited capacity and at the time of writing, Indonesia is adjusting to the new normal. Offices are operating at a maximum of 50% capacity and shopping malls have re-opened with strict social distancing and health protocols in place.

Understandably, office leasing demand weakened in the second quarter as occupiers focused on maintaining the continuity of their businesses in a period of unprecedented disruption. Lease renewals, however, continued as did deals which were already in progress prior to the pandemic. The last three months have also illustrated that for many industries, technology is already in place to facilitate remote working.

We are regularly asked whether this means that there will be a seismic shift in the market where occupiers need less office space as homeworking becomes the norm. There have been numerous reports in mainstream media suggesting that this will be the case but we believe this is a far too simplistic assumption.

While the mass work from home experiment has shown that many of us are able to do our jobs remotely, technology is not a substitute for human interaction. Conversations with colleagues and clients indicate that face-to-face interactions and the social aspect of work are the things they miss the most and the office is also a place for collaboration and for developing company culture. Productivity also needs to be factored in when weighing up the relative merits of offices and remote working.

There will undoubtedly be post-pandemic changes to the office environment. In the short-term, densities will decrease to enable social distancing and the workplace of tomorrow will likely have a stronger focus on health and wellbeing. There is also likely to be more flexibility in working hours and homeworking will be an option for many. However, these were pervasive trends prior to the pandemic and Covid-19 has simply accelerated them.

The office, though, is likely to be as important as ever and corporates are likely to continue to operate out of space that fosters collaboration and serves as a hub for employees. The office of the future will complement remote working arrangements and technology rather than be replaced by them.