It is not only satisfaction with the new working from home arrangements that will stop a rush to the office from the suburbs. People are nervous about public transport and social-distancing measures mean that it’s actually quite time-consuming getting people into large-capacity buildings such as those in the City.
In places of high land value property developers have been reaching for the sky to generate the returns required to make the financial commitment to construct. When only one or two people can use a lift simultaneously, getting large numbers of people back into an office is time consuming – eating further into the day after a long commute.
It isn’t physically possible to get people into these buildings efficiently, possibly until a vaccine is developed. Many companies also remain cautious, even after distancing rules were relaxed to “one-metre plus”, with distancing of two metres likely to remain best practice for many.
All of this implies that areas that were previously regarded as prime property are unlikely to be as valuable as they were in the pre-pandemic world. As the recovery gathers pace, highly centralised countries such as the UK will see the bulk of this effect.
In Europe, ratings agency Fitch thinks that London and Paris will be most impacted by this new trend. “We expect regional markets, and cities with more dispersed office provision such as Amsterdam or Helsinki, to be less affected,” Fitch said.
Social distancing measures mean that the cost per worker of an office space has increased – at least until measures are repealed. Cleaning and other safety measures come with a cost. It is unlikely that many businesses will be willing to sign new leases because of the uncertain outlook for the economy in the recovery period that lies ahead.