Archives for April 2021

Savvy landlords would be smart to look to Singapore and Shanghai—both markets known for domestic space constraints—as they consider strategies to woo workers back to the office post-COVID.

A new research report from Cushman & Wakefield notes that the cities stand out for their innovation in creation of office pods, easily accessible rentable spaces based on a pay-as-you-go or subscription model. Pods have sprung up in both urban and suburban areas, allowing working professionals the flexibility to choose where they work—whether close to home, clients, or colleagues. And while this trend has been focused in Asia thus far, it could well find a niche in the US market, adding yet another choice for office-using companies.

Singapore-based Switch calls its pods the “world’s first workplace on-demand platform,” and currently boasts more than 30 locations in properties including retail malls, hotels, offices and co-working spaces. Similarly, Shanghai property development firm Shui On has incorporated an office pod concept within their managed spaces, and the Cushman report notes that the company’s pods are being used for an average of 4.3 hours per day, which includes weekends. And as COVID-19 continues to upend nearly every notion of working in the modern age, “the idea of an on-demand conveniently located office pod seems like a compelling opportunity,” the report notes. “It offers optimal conditions for productivity, as well as the mental and physical health benefits of getting out of the home environment when working remotely. Users can also benefit from simple reservation and pod access through a mobile application, ensuring a frictionless experience.”

On the employer side, companies may consider pod memberships or subscriptions as part of their recruitment and retention strategies: “by using office pods as an employee benefit, employers can offer an alternative space for those employees who aren’t productive at home or don’t want to commute to a central office, further expanding the talent pool beyond the immediate metro area,” the report reads.

Cost is a consideration investors and landlords should take into account, the report goes on, noting that in China, the cost to build a pod is roughly $309-464 per sqm in US dollars, and they can be rented for around $154-232 per sqm/month. But those returns are heavily dependent upon asset type and location, so investors and landlords must understand foot traffic and local demographics to get a complete picture of the potential market.

The concept is particularly interesting for the hotel asset class: installing pods in lieu of business centers, for example, could be a valuable benefit to loyalty-program tiered members an additional priced amenity for guests—and  “installing these office pods provides the bonus of helping the hotel improve the health and wellness of its business solutions users, a factor that will surely be front of mind as we emerge from the pandemic,” the report notes.  Pods could also fit into high-traffic transit areas like train stations and airports to mimic an office environment for business travelers on the go.

Cushman analysts say the return on investment for pod concepts is “seemingly sound for investors and landlords,” portending a potentially rapid expansion of the concept to meet local demand.

“Investors and landlords across the commercial real estate spectrum have had an out-of-the-ordinary last 12 months, with the COVID-19 pandemic causing unprecedented disruption, as well as accelerating existing trends for markets such as brick-and-mortar retail,” the report concludes. “The opportunity to introduce a solution that could both occupy and monetize vacant space, as well as drive significant footfall from affluent clientele, is worth close attention.”

Source: “Pods May Factor into the Future of the Office”

As the end of the pandemic looms tantalizingly closer, employers have what some analysts are calling a “rare opportunity” to reimagine their F&B (food and beverage) strategy to meet changing workforce needs.

Not surprisingly, the pandemic has brought about a major shift in the way employees eat their lunch.

“In a pre-pandemic world, on-site Food and Beverage (F&B) services increasingly drew employees, catering to a 24/7 work ethos and creating moments of organic connection and inspiration. At tech companies, employee-sponsored fresh meals had become the norm rather than a perk,” reads a new report from Newmark.  “Fast forward one year, and every lunch break takes place at the kitchen table. The value of on-site catering has evaporated and with it the companies that provided meals.”

Companies were forced to quickly adapt during the early days of the pandemic. Some moved to individually packaged items for employees, while others transformed on-campus cafes into commissary kitchens or ghost kitchens. And as Zoom fatigue set in, employers began to reconsider their F&B spend.  Now, with the end (presumably) in sight, they’ll be forced to reckon with how to efficiently and economically provide meals while driving worker engagement, Newmark says.

In the near term, companies will be forced to grapple with changes to employee density and potentially hybrid work weeks, which Newmark says will flatten the food demand curve. But the firm also heralds “the notion of alliance opportunities to partner with large-scale enterprises that promote 24/7 work time, all of which will stimulate retailers and the local economy as offices reopen,” the report says. “We are optimistic that the worst of the pandemic is behind us and that the new normal promises fresh ideas and adaptations.”

What It Will Look Like

The new environment will likely have more electrical and data drops to incorporate touchless technology, Newmark says. Remote ordering will be possible from phones and kiosks, eliminating physical bottlenecks and crowding in F&B spaces while still allowing employees to gather with one another over meals at work.

Also, guest policies will likely change as employers deal with how to best protect the health and safety of their workforce.

Newmark estimates that about 75% of meals will be cooked-to-order—much like a quick-service restaurant—with the remaining 25% as grab-and-go alternatives evenly distributed across offices.

And gone are the days of the large all-hand cafeteria: the F&B spaces of a post-COVID future will feature more soft seating to allow more informal cross-functional connecting. Former conference rooms may be converted into grab-and-go lunchrooms, while larger companies may consider delivery-to-desk services for their people. Also, single-tenant campuses and buildings may employ food hall concepts and high-end quick-service restaurants to differentiate their properties to tenants and to stimulate nearby retail.

Cost Efficiencies

These shifts may also filter down to the benefits employees receive, with some companies transitioning from complete to a partial food subsidy for employees, where an employee badge is loaded with a daily food allowance amount that Newmark says will be “use it or lose it.”

Rethinking the previously normal strategy— for some companies at least—of providing unlimited F&B to employees will allow companies to reclaim the impact that subsidy has on their bottom lines: “excess cafes on a campus that turned into ghost kitchens may remain in their new form in the future unless needed to service employee needs,” the report says. “Companies will look for cost efficiencies in labor and generalized costs. Re-entry planning signals a reduction in services, focusing on lunch as the main meal of the day with a light breakfast and no dinner services.”

In short, employees should expect changes when they return to the office, Newmark says. Conversely, “if spaces don’t look, operate and flow differently, employees may return to work with the perception that the environment is unsafe,” the report notes. “Ultimately, this could diminish the productivity and innovation gains that employers achieve through F&B programs.”

Source: “Companies Reimagine Food & Beverage Spaces As Offices Slowly Reopen”