—TONI KORAZA/UNSPLASH
There is improved but cautious optimism for the office market due to the ongoing vaccine rollout.
The office market remains subdued as corporate occupiers remain on the sidelines with many organizations still awaiting how the pandemic will shape the future real estate landscape.
But while JLL Philippines currently expects leasing conditions to remain weak until end of 2021, market improvement may begin early next year. However, recovery will still depend on economic movements and policy responses due to the pandemic.
Sustained resiliency
Near and medium-term demand suggests uneven recovery of office demand where we anticipate sustained resiliency and growth from tech, e-commerce, logistics and tangent firms, given the higher consumer demand for logistics and on demand services.
IT and business process management (IT-BPM) companies continue to focus on portfolio optimization and prepare their growth plans in anticipation of market recovery. We expect staggered and decentralized office demand from the sector as cost management and increased utilization are likely to underpin their real estate decisions.
Meanwhile, corporate occupiers have mixed responses about work arrangements which fall under these scenarios: full return to office, remote working and a hybrid remote work arrangement.
While some global companies are already implementing their new work arrangements, the impact on the physical space is still unclear, and these conversations may remain fluid as many organizations continue to fine tune their office models for the future.
Supporting the recovery
The vaccine rollout and government policies to support the recovery of the industry are key elements that will drive the narrative of the office sector moving forward. While we expect great variance across industries, organizations and functions with regard to response to the future of work, there are some shared themes that underscore these trends.
First is the greater focus on human centered design, characterized by safety and wellness. We already see heightened protocols to safeguard physical health, but we may see increased attention on overall employee well-being, which adds a new dimension to how we treat and view offices beyond functional and utility perspective.
Second is the incorporation of technology as organizations are now cognizant of how tools have helped improve efficiency and productivity. We anticipate uneven application of the same across companies given the variance in organizational needs and readiness, talent and culture to drive this way of working.
Overall, the current outlook remains uncertain but there are silver linings that suggest an exciting reimagined office space that we can all look forward to beyond the pandemic.
The author is the head of Research and Consultancy of JLL Philippines