Workers’ responses mean office owners’ optimism may be misplaced
Thursday 26 May 2022 Author: Ian Conway

On Monday, the ONS (Office for National Statistics) released its latest labour market survey which asked if hybrid working was still a ‘thing’ now that all Covid restrictions have been lifted.

The survey confirms that hybrid working is in fact here to stay, and suggests companies and commercial landlords are going to have to make it more appealing if they want to attract workers back to the office.

The proportion of people working both at home and at their ‘usual’ place of work rose from 13% in February to 24% in May.

This was because more people had to go into work after travel restrictions were lifted, so the proportion of people working exclusively from home fell from 22% to 14% in the same period.

On that measure alone, the future of the office looks safe enough, but as always the devil is in the detail.

The most common hybrid working pattern in the UK today is working ‘mostly’ from home and ‘sometimes’ from the workplace, which accounts for 42% of responses against 30% a year ago.

Of those who work at home, 62% do so ‘some or all’ of the time, with 28% saying their employer asked them to and 27% saying they preferred it.

Significantly, the proportion of people who plan to split their time equally between work and home, or ‘mostly’ work and ‘sometimes’ home, has fallen.

More people are planning to spend ‘more or most’ of their time working from home, and less time in the office or their usual place of work.

Asked of the benefits of working from home, 78% cited an improved work/life balance while 47% cited improved wellbeing.

Most surprising, 53% of respondents said they experienced fewer distractions while 52% said they found it quicker to complete work.

Almost a third of those surveyed (31%) said they found no disadvantages whatsoever to working from home.

Yet the narrative from the property companies couldn’t be more different.

Land Securities (LAND) said recently it had enjoyed ‘record leasing’ in its London office portfolio and was investing £3 billion in new offices.

Rival British Land (BLND) said leasing volumes across its London ‘campuses’ were the highest in 10 years, although we note it has just sold 75% of the assets at Paddington Central to a Far Eastern sovereign wealth fund and 50% of its planned fourth campus in Canada Water to an Australian pension scheme.

Shares in both stocks are less than 5% below their year-end levels, which suggests investors buy into the idea offices are a decent place to invest. It may also reflect a big advantage for premium office space. We will watch how this story plays out with interest.

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