Does hybrid work have an impact on choices in the real estate market?

More than three-quarters of commercial real estate leaders believe the provision of remote or hybrid working will be essential for businesses in the future, which is sure to have an impact on housing needs.

Real estate investors are increasingly considering the rise of working from home when considering their next investment prospects, both in terms of location and property type. While ultra-central locations are still popular, new ways of working open up more options.

A report of JLL revealed how a large number of companies plan to focus on offering hybrid, flexible and remote working options in order to attract and retain talent, with 77% of surveyed employers saying they believe this will be crucial now and in the years to come.

In terms of impact on the commercial real estate industry, 43% of businesses plan to accelerate investments in flexspace by 2025, and 51% say they will lease flexspace through a third-party provider.

Dr Marie Puybaraud, Global Head of Research, JLL Work Dynamics, said: “The next three years will prove to be an inflection point for real estate as companies chart their future course and rethink the focus of their portfolio.

“The changes accelerated by the pandemic represent an opportunity to pause, reflect on a long-term real estate strategy and how it aligns with future business priorities.”

Going green in businesses and homes

For companies considering the potential impact of their workspace on their environmental and social goals, especially with the continued focus on ESG [environmental, social and corporate governance] – changing how and where people work is an important issue these days.

More than three-quarters of commercial real estate leaders surveyed (77%) said investing in quality space is a priority. A similar amount (74%) said they were likely to pay a premium for green credentials, and 56% of occupants said they plan to do so by 2025.

When it comes to hybrid working, traveling less is another reason many people choose to spend more time at home than in the office. This can be due to both cost and environmental reasons, but it is something that residential property investors are also paying attention to.

As these trends become more prominent on the commercial side, the residential side often offers more homes with offices, and even freestanding workspaces such as garden offices. These are proving to be a major selling point for landlords, as well as landlords offering properties to tenants.

Rental homes for hybrid work

The well-known “space race” that dominated the peak of the pandemic years may have shown signs of easing, with more people returning to city centers and hybrid working overtaking pure homeworking .

But it’s certainly still relevant when it comes to investing in real estate, as offering a home with dedicated work space or an extra bedroom is more popular than ever.

Earlier this year, a study by FJP Property Investment found that for 23% of workers, the increase in hybrid working and working from home has changed their real estate priorities. Nearly half (44%) value space more than ever since the closures, and 25% want more square footage in their property.

Good transportation options are always important for real estate investors considering renting homes, however, like most workers, there will be days when commuting to the office is necessary. Tenants also always need to have access to good amenities, whether within walking distance or by public transport.

Homeowners trying to choose between a one-bedroom or two-bedroom property might want to take these trends into consideration, as renters may be willing to pay more to live in a home with an extra bedroom to allow them to maximize their hybrid work options. .