Goodbye, Office Tete-A-Tete? Fewer Businesses Providing Enclosed Space

Real Estate

The individually enclosed office has long been an important spot for staff gossip and serious work alike in businesses around the world.  New evidence, however, suggests fewer companies are providing such space to employees.

Some 43% companies surveyed by real estate investment and consulting firm JLL said enclosed offices make up less than 5% of their sites, according to a recent JLL report.  That’s up from 35% of companies in 2017, according to the report this month.

The data is based on JLL’s “Global Occupancy Planning” survey, which received responses from 108 leaders across 69 organizations of varying size, industry and geographical region. The research offers a glimpse into how people use space and help real estate experts make decisions on space needs, JLL said.

Behind the trend: A rise in mobility and the “liquid workforce” has reimagined spaces and ways where we work and how we work, JLL said. “Year over year, we are seeing a marked shift toward the open office environment,” Jeremy Doherty, Regional Manager of Occupancy Planning for JLL Asia Pacific, said.  “Millennials want to work in places where they feel comfortable and be more productive. In fact, work environment is one of the key considerations when they make employment decisions,” JLL says

The overall office rental market has also been impacted by the growth of co-working locations such as WeWork, whose financial losses led to speculation of late about the outlook for its much-publicized IPO.  Growth in co-working environments has also spurred new forms of business collaboration.  In China, for instance, information provider TechNode this month said it received investment from Ucommune, a domestic co-working WeWork rival. Ucommune, founded in 2015 and a member of a group of Chinese unicorns with a valuation above $1 billion, sees the hook-up as helping it provide services in its office chains.

The average knowledge worker today is at their his or her desk only for 40% of the time, according to the Gartner Group. Organizations are rapidly adjusting their workplaces to adapt to this new way of working, JLL said.

–Follow me @rflannerychina

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