Future of Alberta Office Space Hinges on Energy Sector Rebound

Greg Kwong Executive Vice President Regional Managing Director CBRE

With the future of office space hanging in the air, some people are resigning themselves to permanently working from home. Others believe they’ll be returning to business as usual once the pandemic is over. What’s probably more realistic is a scenario that falls somewhere in between, says Greg Kwong, regional managing director of CBRE. “Flexibility seems to be the keyword here. Employers are more likely to have staff work from the office two to three days per week and allow them to work from home the other days of the week,” says Kwong. “I can say that 100 per cent of companies out there, whether in retail, industrial, or office, are looking at how they can become more efficient going forward.” While flexible working arrangements might infer a slight reduction in office space, some corporate tenants are saying they might need more room to replace cubicles and desk-sharing arrangements with individual offices. “No one expects COVID-19 to be around forever, but the longer it exists, the more indelibly etched work patterns become,” says Kwong. What’s of greater concern to the Alberta landscape than COVID, however, is how quickly it can bounce back from a severely downtrodden oil and gas sector, Kwong says. “The key to the Alberta economy is access to Tidewater and the United States. The Keystone XL pipeline and all these LNG pipelines that are being proposed need to actually get built.” And transitioning to a tech-based society in the interim isn’t the solution, says Kwong, because almost every city in every market is trying to do it. “There's close to 70 million sq. ft. of office space in Calgary and the tech sector still represents not even 3 per cent of that that.

“I would suggest that even if they were to go up to 10 per cent, they are not the controlling sector. Traditional companies adopting new technologies are more likely to force landlords to alter their way of doing business rather than the actual tech sector.” Kwong remains optimistic that the oil and gas sector will go through a rebound at some point.

“I'm on that bandwagon that there just is no other alternative that can replace oil and gas at this point,” he says. “I truly believe there will be a rebound, within three to five years. So will that spell another boom for the office market? I think it'll help.”

■ Barbara Balfour

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