Covid-19 Part IV: What’s the future for high-rise buildings

As part of our series on ‘Working in a post-pandemic world’, guest blogger Crispin Auden, Linden Property Services reflects on the future of high-rise buildings

Before Covid-19 wreaked havoc on our working lives and the global economy, I thought the greatest threat to economic epicenters such as Dubai, Hong Kong, London and New York was global warming and the subsequent rise of sea levels. Now, I’m not so sure.

Given the increasing frequency of pandemics (four in 16 years) how safe are our high rise, multi-occupancy buildings in an age when diseases are spread via invisible respiratory droplets and contact with contaminated surfaces.

Will the combination of fear of contamination at work and enabling Working From Home (WFH) technology result in a profound and fundamental change in how and where we work and therefore, end our need for and desire to work in those totems of progress, skyscrapers.

Add to that mix the almost ubiquitous desire/need for global travel (for business or pleasure),  as well as increasing urbanisation and climate change – factors which accelerate contamination locally and globally – and one has to question the wisdom of herding millions of people, into thousands of air conditioned high-rise buildings, which can only be accessed by small vertical moving boxes carrying 2-30+ people.

So, has the death knell been rung for high-rise high-density buildings, or have landlords and owners invested too much to allow this to happen. We should remember what gave value to these buildings in the first place. Occupiers provide the income stream which services the capital and debt required to construct and own these buildings. So what makes these buildings worth so much to occupiers:

  • People are every service provider’s key asset therefore a central hub location makes the building accessible to the largest pool of talent - peripheral spoke or rim locations cannot benefit in the same way
  • Agglomerations of buildings provide locations for and access to markets - is this still so valuable in the age of electronic communications and trading
  • Representation in major centers carries prestige – the idea that you are there to do business with the biggest players. In this connected and globalized world is that as valuable as it once was
  • The ability to develop and manage their corporate culture or branding - this is perceived to make delivery of the service more effective and the attraction of the “right sort” of talent easier.

Will occupiers be happy to pay high-density-rates, when they have to adopt low-density, physical distancing protocols and, most of the workforce spend about half their time in the office?

Will the era of offices adopting a factory farming philosophy – ‘pack ’em in and reduce your average (per head) occupancy costs’ – end in this post-pandemic age? Occupiers will not wish to risk the welfare of their staff, so why should they pay as much for a building which they cannot utilise as intensively? Will they pay enough to justify the colossal costs of skyscraper construction?

I believe that nothing short of universal coverage with an effective vaccine will make people feel safe again (until the next pandemic, of course). Some claim that ‘smart buildings’ hold the key to a return to pre-Covid-19 occupancy models. They argue that buildings, equipped with the following, will be safe, taken in combination with face coverings and frequent hand washing:

  • Social distancing sensors
  • Air quality monitors
  • Fever detection technology – combining AI and large crowd scanning dispenses with the need for individual scanning of people entering a building
  • Contactless technology – in transit and office areas
  • Apps which allow people to order their food (for collection), from their desks.

Others suggest that multi-use buildings (office/residential/hotel/leisure/retail) will take sufficient rush hour pressure off vertical travel within buildings. But you will still have to transport everyone to their destinations, in lifts, via lift lobbies. Reducing lift capacity from 30 to 6 people will not help with this.

Is the race for the sky at an end? Will we instead, create low-rise, hub and spoke commercial centers, nearer our homes, where we can meet colleagues, clients, advisors and customers, as well as work in an office environment, as often as we want.

Given the fact that almost 50% of the working population have been WFH over the last few months, surveys are showing that:

  • Many have enjoyed it – the combination of not having to commute and spending more time with their families has proved a great bonus. Their work/life balance has never been so good
  • Older workers, who tend to live in larger homes and whose children may have flown the nest, have had the space and the ‘kit’ to WFH with relative ease and, surveys suggest, increased productivity.

But, speaking to Millennials, WFH has not necessarily been such a great experience:

  • Earlier blogs in this Covid-19 series have highlighted the fact that they tend not have the room or the IT/comms capability to be as efficient and effective at home, as they are in the office
  • Home schooling has been a severe impediment to home working – in terms of disruption and the battle for bandwidth
  • Their capacity to learn from listening to and collaborating with colleagues is severely hampered
  • They miss the sociability of the workplace and a City Centre location.

So, there appears to be an age-related schism. Younger employees need to build their contact networks: they need to learn from more experienced colleagues: to them, it is more important to be seen by their superiors to progress. Concentration of numbers helps training and offers increased opportunities. And the young are more likely to live closer to city centres, so they are not as susceptible to commuting woes.

But the young are seldom the highest revenue earners in any business. Is there a good case for retaining the most expensive properties (with the greatest risks to staff welfare and the most stringent occupation restrictions), if the biggest fee earners are happy and effective working mostly from home? I suspect that an occupier’s cost-benefit analysis will look rather different in future.

City Centre locations have been built on the premise of intensive use of public transport. These locations therefore carry the highest risk of contagion - even before we get to work. Cycling and walking do not offer realistic alternatives in most cases and reverting to single occupancy cars is a seriously retrograde step.

Maybe our post-pandemic world is in transition and we will slowly reduce our dependency on centralized working in ‘white collar factories’. Maybe the age of buildings, designed to accommodate large numbers of workers at minimum occupancy costs is nearing its end - no matter how many pool tables there are in recreation areas and chocolate fountains in receptions.

Devolution of the workplace, from city center hubs to local based satellite offices, will have profound health and safety benefits, but it will also create challenges such as how do you:

  • Create a strong sense of ‘team’ across a network of offices
  • Optimize the learning experience for junior and less qualified colleagues? Most students will tell you that on-line learning is not as much fun or as effective as F-2-F interaction
  • Line manage team members to ensure maximin efficiency
  • Ensure that WFH remains an option, not a right.

In short, we face the possibility of a profound schism with the past and huge implications for property owners and governments, tasked with creating an infrastructure which is both fit for purpose for ‘blended work practices’* and profitable.

Nothing in these musings is new. It was all happening already. Office workers have been astonished by how quickly and effectively their companies have put in place effective WFH systems and protocols.

But like a number of other areas of our lives (shopping/air-travel/how and where we live) Covid-19 has been an accelerator – almost a catalyst for changes which were coming. In a world where we can chose how and where we work, these changes will be occupier driven because it is the amount that they are prepared to pay which governs the value, which in turn justifies the cost.

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*Every organisation will have a unique combination of office working and WFH, based on their culture, operational protocols and business plan.

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