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Safety, Service, Flexibility key to Successful Future Offices

Office Market

It has become fashionable to suggest the COVID-19 lockdown and the rise of home office has consigned the office as we know it to the dustbin of history. Máriusz Várnai, CEO of Diófa Ingatlankezelő Kft., says the future will be more nuanced than that, though it will undoubtedly bring change.

Máriusz Várnai

One complicating factor is that we have not yet finished with this crisis. Broadly speaking, we know that today is not the same as yesterday, but we cannot yet be sure what tomorrow will be like.

“In the long-term, the way we use offices will change,” says Várnai, who heads the facility management and property management unit of the Diófa Alapkezelő fund management company. In the near term, building use will likely be shaped by the clients themselves.

It may have been unprecedented, but the start of the lockdown was the easy part: get the tenants safely out of the building, and then effectively put it to sleep to control costs. When and how (and how many) tenants return is much more complicated.

Much of it has to do with good communication. “We have been telling the tenants what we are doing to make the buildings safe, introducing ‘keep your distance’ signage, hand sanitizers in front of the building and in public spaces, introducing deep cleaning, without creating a sense of panic.”

Naturally, Várnai’s PM and FM teams did plenty of brainstorming about what was required to reopen offices, but part of the process also involved accessing networks of contacts internationally to learn from best practices.  

At the height of the lockdown, Diófa’s offices were virtually 100% vacant. How full they are now depends, in part, on the tenant mix for each individual building.  

“We have sites where 80% of the tenants are international, and these tend to follow practices drawn up by the HQ in the mother company. One of the biggest tenants is planning not to bring all its people in until the beginning of next year, for example.” Depending on tenant mix, Várnai estimates office vacancy at between 30-50%.

Office Evolution

Looking further ahead, how we use those offices will evolve, the CEO believes, but they are far from destined to become extinct.

“We will still need offices to meet, to collaborate, to brain storm, but the balance will change. We now know there can be real productivity benefits from working from home, but also if we work two days home office there will be real benefits for the environment.” He thinks a split of three days in the office, two days at home is a very possible development.  

For a company such as Diófa Ingatlankezelő Kft., staff and tenant safety are clearly the number one priority, but business itself is a balancing act between what the tenants demand on one side, and what the fund investors, both institutional and private, are looking for on the other. The sweet spot lies somewhere in the middle, where the interests of both parties intersect. A well-run office with good services is popular with tenants, who stay longer and secure income for the fund.

There are rumors on the market of major multinationals wanting to give office space back, though Diófa has received no such request, Várnai says. He believes landlords will be able more competitive by offering so called “swing areas”, space that can be rented by the hour or week as requested, perhaps so the same number of employees can gather safely in a bigger room.  

The next steps are likely to be less contact with building staff, and the wide spread use of easy to clean touch screen technology. Várnai argues that the ability “to bring services into the building” so employees can keep things local and do not have to travel into the city will also be key.

One thing is for sure, the pandemic has alerted us to the need to live our lives differently. “These viruses will be around, if not COVID then flu or something else. We will have to live with this; we have to be prepared.”

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