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Remote work spaces to impact consumer life
OFFICE EXPANSION DEMAND TO REMAIN THIN IN 2021
Rents declined by 4% in Q4 2020
Multinational corporations are expected to remain cost-cautious as expansion demand will likely be thin in 2021, according to CBRE forecasts. Office leasing momentum weakened in Q4 2020, following the reintroduction of measures to contain the fourth wave of local COVID-19 infections, according to CBRE.
According to its report, overall rents declined by 4% QoQ in Q4 2020, bringing the annual decline to -17.4% YoY in 2020. Rents in Wan Chai/ Causeway Bay fell the most across the major submarkets, leaving a 20.1% fullyear decline. Hong Kong East was the best performing submarket, with rents falling by 8.3%.
Full-year net absorption registered a negative 2.2 million sq. ft., the largest decline on record.
Overall vacancy continued to climb to 9.9%, the highest since Q2 of 2009, with the underlying 8 million sq. ft. of vacant space as of end-2020, the highest since December 1999.
High availability of vacant space will ensure further rental pressure across submarkets. CBRE expects Grade A office rents to decline by another 5% across major submarkets in 2021.
Moreover, pent-up demand from recent initial public offerings will likely translate into improving leasing momentum in H2 2021. Chinese corporates are expected to become more active this year, provided the pandemic is brought under control and travel restrictions are removed.
“The first half of 2021 will likely see office rents trend down further as high vacancy continues to struggle landlords amidst limited new and expansion demand,”CBRE Hong Kong executive director Alan Lok said.
The market should see a pick-up in leasing demand from Chinese firms as fund raising activity continues to flourish. A full resumption of crossborder people flow, however, is crucial to support a rally in such leasing activities,” he added.
Many consumers have started going back to office
Remote work spaces to impact consumer life
The implementation of workfrom-home setup amongst many businesses has affected consumer life, with consumers struggling to manage their time amidst a hindered work-life balance, according to Euromonitor International’s latest forecast on 2021 consumer trends.
According to the report, the rippling effect of remote work on consumer life will range from clothing choices to technology spend, eating habits, and beyond.
“Purchase decisions will shift towards casualisation in terms of workwear and beauty routines, but affordable premiumisation will drive food and beverage choices to create restaurant-quality meals at home,” according to the report.
Many consumers also started going back to office, albeit less frequently, as a blended approach to work setup is now expected amongst businesses.
As such, where and how consumers spend around their job schedules are also impacted.
“Loss of commuters and outof-home office limit on-the-go occasions, such as grabbing coffee, running errands on lunch breaks or socialising with colleagues after work. With less mobility, consumers are spending more time to emulate the dining, shopping or other leisure experiences in their homes,” the report reads.
Euromonitor research manager Herbert Yum noted that the impact of remote work on consumer life in Asia is more significant than that of the United States or the European Union since work from home is a less common practice Asia.
“It is expected that after the COVID pandemic, the changes shall partially remain and employees in general are more familiar working remotely, as well as adapting to e-commerce shopping behaviour,” Yum said.
Engaging consumers amidst blended setup
There has also been a noticeable hindrance in work-life balance since the work from home setup was implemented due to the pandemic.
“Lack of a proper switching between office and off-office hours is one of the key factors that hinders a proper work-life balance during remote working,” Yum said
This is particularly true in Asia as countries such as China, Japan and South Korea, the concept of more work, more pay or better performance, is planted in most of the employees’ mind,” he added.
To cope with such hindrance, Yum suggests that businesses encourage managers to stay connected with their teams, employees to set offoffice hour alarm, as well as educate and remind employees to take a break regularly.
Businesses can focus on products and services that improve efficiency and productivity without losing the human element. Tools leveraging AI can also enhance group work, social interactions, and even individual time management.
“Improving the overall online working infrastructure and software of the company is the most important step. However, ensuring each of the employees has the right set of equipment and tools is also essential for businesses to keep them engaged,” Yum said.
