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FUTURE OF OFFICES: NO GOING BACK
Future of Offices: Permanent health regime
4
Q&A: A smarter way of working
5
Offices now have a building standard for the COVID-19 era
6
Future of Offices: Asia-Pacific – first in, first out
7
Future of Offices: A flexible shake-out
8
Future of Offices: Europe to reveal its differences
9
Future of Offices: US market in lockdown
10
Future of Offices: Asia-Pacific – a region in flux
OFFICES
Future of Offices: The end of urbanisation?
BY RACHEL FIXSENSEPTEMBER / OCTOBER 2020 (MAGAZINE)
Save article
The seemingly unstoppable progress of urbanisation has underpinned real estate strategies in recent years. Is the mega-trend about to go into reverse? Rachel Fixsen investigates
Over the past decade, the institutional real estate industry has been increasingly focused on capturing so-called mega-trends, from demographic shifts to technological change and global warming. One of the most popular has been urbanisation. From Berlin to Toronto, cities have been getting bigger and bigger, attracting young, mobile workforces and providing the environment for the new urban mantra of ‘live, work and play’.
Real estate investors were quick to realise that this played in their favour, supporting their investments in urban residential, new office submarkets, downtown retail and urban logistics. Cross-border investment strategies also moved away from the traditional focus on national markets to city markets, and micro-markets within cities.
Before COVID-19 gripped the world, far from petering out, the human migration towards cities was intensifying, says Lisette van Doorn, CEO of the European arm of the Urban Land Institute. “The strong urbanisation trend we’ve seen over the past couple of years has been driven by opportunities for work and the preference for live, work, and play in a closer environment. This was initially driven by younger generations but, over time, this trend has been picked up by older generations as well.”
Other macro trends, such as a focus on sustainability and digitalisation, have been amplifying this tendency. “People don’t need to leave their homes as much as before because many things can be done from behind a computer: work, shopping and entertainment. However, we’ve never seen so many people wanting to come together and eager for experience.”
close
Richard Piklington
What if this mega-trend, which has underpinned countless real estate strategies in recent years, were to go into reverse?
In a recent international survey by PwC of 700 company leaders, 61% of chief executives said they believed that, after the pandemic, there will be lower workplace density than before. On the role cities would play in the future, they were evenly split: 34% believed the shift towards de-urbanisation would continue, while 38% said they thought it was temporary.
In the US, urban population growth and housing demand were already slowing by the middle of past decade – partly because of the departure of ageing millennials. COVID-19 threatens to turn that slowdown into an emergency stop and reverse.
According to a recent paper by Green Street Advisors, the “need for more space, coupled with desire to avoid dense neighbourhoods and mass transit, has spurred an urban flight of homeowners and renters”. It says: “Home sales in the suburbs are outpacing urban areas.”
But will the pandemic have a lasting effect, or will the urbanisation trend reassert itself? Richard Pilkington, senior managing director, head of European Real Estate at Cain International, believes urbanisation could well be reversed in the short term – but only for cities dependent on transport infrastructure to draw in talent from commuter belts such as London and New York City. “However, it is human nature to want to be with other people, and sharing spaces through urbanisation is an essential part of building relationships and developing young talent,” he says.
Urban landscapes present a more efficient way of spending time for the ‘live, work, play’ generations who like to have multiple options on their doorstep. Pilkington says: “Therefore, the trend to move to more rural settings will likely snap back once a vaccine is readily available and spaces and transport have adjusted to curb the spread of potential future viruses.”
Thomas Beyerle, managing director at Catella Property Valuation, sees the increase in city sizes slowing down somewhat – by no means a reversal of the urbanisation trend. “We have been experiencing a strong run on the European core cities for around two decades, which is reflected in the quasi-synchronous rise in rents and purchase prices,” he says. “Added to this is the very strong social structure – one-person households form the strongest group here, accounting for over 50% of the total.” A spatial change usually only occurs when a family is founded, he says, adding that in this demographic group he does see a trend towards even greater suburbanisation.
Nuveen Real Estate, which manages regional and sector-specific ‘cities funds’, uses a proprietary city-filtering process to identify the “top 2% of cities that we believe should benefit from global megatrends”. First on its list of five megatrends is urbanisation.
Alice Breheny, head of research for Nuveen Real Estate, says: “It’s fair to say that migrating to cities doesn’t seem like the most compelling idea during a global pandemic. At a time of social distancing, people have been avoiding people and staying clear of densely-used areas of cities. But as lockdown measures have eased, we are starting to see people enjoying the many amenities we associate with a vibrant city again.”
This is a challenging time, Breheny says, but looking to the future – once the virus is successfully contained and/or a vaccine developed – activity will pick up, and cities will continue to be a hub for economic growth.
Although Nuveen does not believe urbanisation will be reversed, it is likely that some cities will fare better than others. Quality of life, sustainability and innovation are all metrics that will become even more important, along with wellbeing, says Breheny. Global gateway cities are unlikely to see their position in the hierarchy compromised but, as was happening before the pandemic, their share of international growth may dwindle.
“Reliance on public transport would previously have been a positive, whereas now accessibility by bike or car may seem attractive,” she says. Breheny points to micro behaviour within the broader trend of urbanisation, saying it is here that change is likely to happen. “We will continue to see people seek the social and economic benefits of being attached to a successful city, but the metrics we use to measure a city’s future success are being monitored as we move through the pandemic.
“What will be interesting is to see where within cities people chose to live, with perhaps suburbs having a bit of a revival as people place more value on space,” she says, adding that this will, in turn, influence where and how people shop or where they are willing to work.
Alice Breheny
Mixed-use, wellness-equipped, spaces will be the winners coming out of the crisis, according to Pilkington. He expects to see more assets diversifying their offer to appeal to this shifting demand. “Commercial urbanism will likely continue to grow but, ultimately, all occupiers will seek to utilise space in a more generous and flexible way,” he says.
The drive to maximise office occupancy of the last few years is likely to shift into reverse, he says, with occupiers using space differently – configuring it to foster collaboration, while allowing appropriate distance between staff.
People may be socially distancing right now, but Beyerle is in no doubt this is a forced situation that goes against their fundamental nature. “The human being is, after all, a social being. He almost loves to communicate with others in his physical form.” Which means, according to Beyerle, that more urban meeting spaces and offers to bring people together must be created.
Looking ahead, Van Doorn says people might prefer cities that “fit better with the human size”, enabling active transportation such as cycling and walking, and are lively, affordable and sustainable.
“This may see traditional second-tier cities becoming more preferred at the cost of global cities, which might suffer more and take longer to recover and adjust to these trends,” she says. Changing working patterns might impact the demand for physical offices and where they are located, although it is still very early to tell how this will play out.
“On the one hand, the demand for offices may decrease as a result of more remote working and an economic downturn,” Van Doorn says. “But, on the other hand, space requirements may increase as a result of continued social-distancing measures, the demand for more meeting and collaboration space and more spread-out office locations to accommodate staff.”
ㅡㅡㅡㅡ
The Guardian -
The pandemic will accelerate the evolution of our cities
Norman Foster
City centres are likely to see fewer cars in future, but that would have happened eventually without Covid-19
Thu 24 Sep 2020 11.38 EDT
Share on FacebookShare on TwitterShare via Email
Predicting the future of cities is risky, especially if one heeds the words of the American baseball legend, Yogi Berra, that “the future ain’t what it used to be”.
In the period since the start of the pandemic it might seem as if everything is different, but in the long term, I would suggest that rather than changing anything, it has merely hastened and magnified trends that were already apparent before the virus struck.
The history of civilisation is the history of cities and civic spaces – the words are intertwined. Cities are the future, statistically more so today than ever before. In 1920, New York and London were the largest cities in the world. Today they are not even in the top 10 – overtaken by a superleague of mega-cities, mostly in continental Asia. Cities are in a constant state of evolution, forever changed by the technology of their time.
The Great Fire of London in 1666 resulted in the building codes that created the Georgian city of fireproof brick construction. The cholera epidemic in the mid-19th century stopped the Thames being an open sewer, leading to a system of modern sanitation and the Thames Embankment. At the end of that century, mobility was horse-drawn and the city was mired in layers of horse dung, creating stench and disease. The automobile was the saviour, and cleaned up the roads – before it later became the urban villain. Then tuberculosis was a killer, and encouraged the green park movement as well as the roots of modern architecture, with its emphasis on sunlight and outdoor space. The Great Smog of London in 1952 and its death toll prompted the Clean Air Act in 1956, and the switch from coal to gas.
But every one of those consequences – fireproof buildings, sewage systems, green parks, the automobile – would have happened anyway. The crises of the day hastened and magnified their arrival.
History also tells us that the future is not two-metre distancing. The last major pandemic of 1918-20 created deserted city centres, face masks, lockdowns and quarantines. But it also heralded the social and cultural revolution of the 1920s with newly built gathering spaces: department stores, cinemas and stadiums.
What might be the equivalent hallmarks of our coming age, after Covid-19? We have already witnessed dramatic increases in the mobility of people, goods and information while simultaneously confronting the realities of climate change and carbonisation. We are now seeing trends away from fossil fuel to cleaner electric propulsion, vehicles that can charge by induction, be driverless and “platoon”, nose to tail; a shift against car ownership by the young with an appetite for ride-sharing and on-demand services such as Uber; the rise of scooters and e-bikes and the prospect of drone technology for moving people and goods.
To these trends in mobility, add in new patterns of working. The traditional workplace will survive, and be even more appreciated for its social and creative opportunities. But it will be used far more flexibly, and balanced with time spent operating out of home or a third place – an Alpine eyrie or digital Starbucks in the high street.
The cumulative effect of even just a few of these trends will change the infrastructure of our cities as progressively less space is needed for vehicles. We can already see the effects in central London, with proposals for pavement widening and conversion of traffic lanes to bike lanes; elsewhere, entire streets have been given over to terraces for dining. Radiant heating and cooling will extend the seasonal use of outdoor spaces.
Pedestrianisation is not new to central London – I have memories of crusading for the removal of cars from Horse Guards Parade and the north side of Trafalgar Square – transformations that are long forgotten now. What is new is the rate of change – especially in terms of attitudes of mind to the beautification of the city.
City centres will have the potential to be quieter, cleaner, safer, healthier, more friendly, walkable and bikeable and vitally, if the opportunity is grasped, to be greener.
Over the past decade projects in three continents have shown the way forward. In the US, Boston’s “Big Dig” created a centrepiece 12-hectare (29-acre) site of parks and boulevards by burying an elevated highway in tunnels. In Europe, the Madrid Rio project “disappeared” in a similar way, creating a huge new 10km-long urban park. In Asia, Seoul has created a 40-hectare public recreation space in the city centre, on the site of a stream that was covered over with roads during rapid postwar development. More recently, Paris announced plans for 650km of “post-lockdown” cycleways.
Neighbourhoods have seen a resurgence in appeal with the tag of “the 15-minute city”. The ideal of being able to live, work, sleep, shop, dine, be educated, entertain and be entertained – with all the venues for as many of those activities as possible to be within walking distance of each other. The attraction of neighbourhood living is not new, but it has been given a timely and welcome boost by the pandemic. It is now opportune to build on that through a combination of design interventions and the politics of zoning.
These dense communities have not seen higher infection rates, rather the problem is dense cramped households, whether within cities or suburbs – an issue before the pandemic. Affordable accommodation remains a challenge and is inseparable from the plight of homeless people.
Issues of agriculture could also help transform our cities into even more green enclaves. Urban farming of vegetables, using hydroponics, could deliver fresh food, cheaper and more flavourful, with higher yields and a fraction of the use of precious water – all delivered on the urban doorstep, a new version of the farmers’ market. An obsolete multistorey car park is the ideal urban farm. In the quest for the self-sustaining city, holistic thinking that cuts across traditional bureaucracies is needed (the conversion of waste to energy is a good example). In the move to greater autonomy we need to question the traditional power grid, which, for example, saw 2.5 million Californians without electricity last summer.
In the bigger picture, globalisation has lifted huge segments of humanity out of poverty, but it is not without the dire consequences of localised rust belts. Will the economic challenges of a pandemic lead to fewer and bigger, in the art of survival? The hope is a better balance – shared global action on the big environmental and health issues, and local action in the making, growing and powering of our connected societies.
• Norman Foster is an architect
OK
Skip to main contentSkip to navigation
Real AssetsMast navigation
FUTURE OF OFFICES: NO GOING BACK
Future of Offices: Permanent health regime
4
Q&A: A smarter way of working
5
Offices now have a building standard for the COVID-19 era
6
Future of Offices: Asia-Pacific – first in, first out
7
Future of Offices: A flexible shake-out
8
Future of Offices: Europe to reveal its differences
9
Future of Offices: US market in lockdown
10
Future of Offices: Asia-Pacific – a region in flux
OFFICES
Future of Offices: The end of urbanisation?
BY RACHEL FIXSENSEPTEMBER / OCTOBER 2020 (MAGAZINE)
Save article
The seemingly unstoppable progress of urbanisation has underpinned real estate strategies in recent years. Is the mega-trend about to go into reverse? Rachel Fixsen investigates
Over the past decade, the institutional real estate industry has been increasingly focused on capturing so-called mega-trends, from demographic shifts to technological change and global warming. One of the most popular has been urbanisation. From Berlin to Toronto, cities have been getting bigger and bigger, attracting young, mobile workforces and providing the environment for the new urban mantra of ‘live, work and play’.
Real estate investors were quick to realise that this played in their favour, supporting their investments in urban residential, new office submarkets, downtown retail and urban logistics. Cross-border investment strategies also moved away from the traditional focus on national markets to city markets, and micro-markets within cities.
Before COVID-19 gripped the world, far from petering out, the human migration towards cities was intensifying, says Lisette van Doorn, CEO of the European arm of the Urban Land Institute. “The strong urbanisation trend we’ve seen over the past couple of years has been driven by opportunities for work and the preference for live, work, and play in a closer environment. This was initially driven by younger generations but, over time, this trend has been picked up by older generations as well.”
Other macro trends, such as a focus on sustainability and digitalisation, have been amplifying this tendency. “People don’t need to leave their homes as much as before because many things can be done from behind a computer: work, shopping and entertainment. However, we’ve never seen so many people wanting to come together and eager for experience.”
close
Richard Piklington
What if this mega-trend, which has underpinned countless real estate strategies in recent years, were to go into reverse?
In a recent international survey by PwC of 700 company leaders, 61% of chief executives said they believed that, after the pandemic, there will be lower workplace density than before. On the role cities would play in the future, they were evenly split: 34% believed the shift towards de-urbanisation would continue, while 38% said they thought it was temporary.
In the US, urban population growth and housing demand were already slowing by the middle of past decade – partly because of the departure of ageing millennials. COVID-19 threatens to turn that slowdown into an emergency stop and reverse.
According to a recent paper by Green Street Advisors, the “need for more space, coupled with desire to avoid dense neighbourhoods and mass transit, has spurred an urban flight of homeowners and renters”. It says: “Home sales in the suburbs are outpacing urban areas.”
But will the pandemic have a lasting effect, or will the urbanisation trend reassert itself? Richard Pilkington, senior managing director, head of European Real Estate at Cain International, believes urbanisation could well be reversed in the short term – but only for cities dependent on transport infrastructure to draw in talent from commuter belts such as London and New York City. “However, it is human nature to want to be with other people, and sharing spaces through urbanisation is an essential part of building relationships and developing young talent,” he says.
Urban landscapes present a more efficient way of spending time for the ‘live, work, play’ generations who like to have multiple options on their doorstep. Pilkington says: “Therefore, the trend to move to more rural settings will likely snap back once a vaccine is readily available and spaces and transport have adjusted to curb the spread of potential future viruses.”
Thomas Beyerle, managing director at Catella Property Valuation, sees the increase in city sizes slowing down somewhat – by no means a reversal of the urbanisation trend. “We have been experiencing a strong run on the European core cities for around two decades, which is reflected in the quasi-synchronous rise in rents and purchase prices,” he says. “Added to this is the very strong social structure – one-person households form the strongest group here, accounting for over 50% of the total.” A spatial change usually only occurs when a family is founded, he says, adding that in this demographic group he does see a trend towards even greater suburbanisation.
Nuveen Real Estate, which manages regional and sector-specific ‘cities funds’, uses a proprietary city-filtering process to identify the “top 2% of cities that we believe should benefit from global megatrends”. First on its list of five megatrends is urbanisation.
Alice Breheny, head of research for Nuveen Real Estate, says: “It’s fair to say that migrating to cities doesn’t seem like the most compelling idea during a global pandemic. At a time of social distancing, people have been avoiding people and staying clear of densely-used areas of cities. But as lockdown measures have eased, we are starting to see people enjoying the many amenities we associate with a vibrant city again.”
This is a challenging time, Breheny says, but looking to the future – once the virus is successfully contained and/or a vaccine developed – activity will pick up, and cities will continue to be a hub for economic growth.
Although Nuveen does not believe urbanisation will be reversed, it is likely that some cities will fare better than others. Quality of life, sustainability and innovation are all metrics that will become even more important, along with wellbeing, says Breheny. Global gateway cities are unlikely to see their position in the hierarchy compromised but, as was happening before the pandemic, their share of international growth may dwindle.
“Reliance on public transport would previously have been a positive, whereas now accessibility by bike or car may seem attractive,” she says. Breheny points to micro behaviour within the broader trend of urbanisation, saying it is here that change is likely to happen. “We will continue to see people seek the social and economic benefits of being attached to a successful city, but the metrics we use to measure a city’s future success are being monitored as we move through the pandemic.
“What will be interesting is to see where within cities people chose to live, with perhaps suburbs having a bit of a revival as people place more value on space,” she says, adding that this will, in turn, influence where and how people shop or where they are willing to work.
Alice Breheny
Mixed-use, wellness-equipped, spaces will be the winners coming out of the crisis, according to Pilkington. He expects to see more assets diversifying their offer to appeal to this shifting demand. “Commercial urbanism will likely continue to grow but, ultimately, all occupiers will seek to utilise space in a more generous and flexible way,” he says.
The drive to maximise office occupancy of the last few years is likely to shift into reverse, he says, with occupiers using space differently – configuring it to foster collaboration, while allowing appropriate distance between staff.
People may be socially distancing right now, but Beyerle is in no doubt this is a forced situation that goes against their fundamental nature. “The human being is, after all, a social being. He almost loves to communicate with others in his physical form.” Which means, according to Beyerle, that more urban meeting spaces and offers to bring people together must be created.
Looking ahead, Van Doorn says people might prefer cities that “fit better with the human size”, enabling active transportation such as cycling and walking, and are lively, affordable and sustainable.
“This may see traditional second-tier cities becoming more preferred at the cost of global cities, which might suffer more and take longer to recover and adjust to these trends,” she says. Changing working patterns might impact the demand for physical offices and where they are located, although it is still very early to tell how this will play out.
“On the one hand, the demand for offices may decrease as a result of more remote working and an economic downturn,” Van Doorn says. “But, on the other hand, space requirements may increase as a result of continued social-distancing measures, the demand for more meeting and collaboration space and more spread-out office locations to accommodate staff.”
ㅡㅡㅡㅡ
The Guardian -
The pandemic will accelerate the evolution of our cities
Norman Foster
City centres are likely to see fewer cars in future, but that would have happened eventually without Covid-19
Thu 24 Sep 2020 11.38 EDT
Share on FacebookShare on TwitterShare via Email
Predicting the future of cities is risky, especially if one heeds the words of the American baseball legend, Yogi Berra, that “the future ain’t what it used to be”.
In the period since the start of the pandemic it might seem as if everything is different, but in the long term, I would suggest that rather than changing anything, it has merely hastened and magnified trends that were already apparent before the virus struck.
The history of civilisation is the history of cities and civic spaces – the words are intertwined. Cities are the future, statistically more so today than ever before. In 1920, New York and London were the largest cities in the world. Today they are not even in the top 10 – overtaken by a superleague of mega-cities, mostly in continental Asia. Cities are in a constant state of evolution, forever changed by the technology of their time.
The Great Fire of London in 1666 resulted in the building codes that created the Georgian city of fireproof brick construction. The cholera epidemic in the mid-19th century stopped the Thames being an open sewer, leading to a system of modern sanitation and the Thames Embankment. At the end of that century, mobility was horse-drawn and the city was mired in layers of horse dung, creating stench and disease. The automobile was the saviour, and cleaned up the roads – before it later became the urban villain. Then tuberculosis was a killer, and encouraged the green park movement as well as the roots of modern architecture, with its emphasis on sunlight and outdoor space. The Great Smog of London in 1952 and its death toll prompted the Clean Air Act in 1956, and the switch from coal to gas.
But every one of those consequences – fireproof buildings, sewage systems, green parks, the automobile – would have happened anyway. The crises of the day hastened and magnified their arrival.
History also tells us that the future is not two-metre distancing. The last major pandemic of 1918-20 created deserted city centres, face masks, lockdowns and quarantines. But it also heralded the social and cultural revolution of the 1920s with newly built gathering spaces: department stores, cinemas and stadiums.
What might be the equivalent hallmarks of our coming age, after Covid-19? We have already witnessed dramatic increases in the mobility of people, goods and information while simultaneously confronting the realities of climate change and carbonisation. We are now seeing trends away from fossil fuel to cleaner electric propulsion, vehicles that can charge by induction, be driverless and “platoon”, nose to tail; a shift against car ownership by the young with an appetite for ride-sharing and on-demand services such as Uber; the rise of scooters and e-bikes and the prospect of drone technology for moving people and goods.
To these trends in mobility, add in new patterns of working. The traditional workplace will survive, and be even more appreciated for its social and creative opportunities. But it will be used far more flexibly, and balanced with time spent operating out of home or a third place – an Alpine eyrie or digital Starbucks in the high street.
The cumulative effect of even just a few of these trends will change the infrastructure of our cities as progressively less space is needed for vehicles. We can already see the effects in central London, with proposals for pavement widening and conversion of traffic lanes to bike lanes; elsewhere, entire streets have been given over to terraces for dining. Radiant heating and cooling will extend the seasonal use of outdoor spaces.
Pedestrianisation is not new to central London – I have memories of crusading for the removal of cars from Horse Guards Parade and the north side of Trafalgar Square – transformations that are long forgotten now. What is new is the rate of change – especially in terms of attitudes of mind to the beautification of the city.
City centres will have the potential to be quieter, cleaner, safer, healthier, more friendly, walkable and bikeable and vitally, if the opportunity is grasped, to be greener.
Over the past decade projects in three continents have shown the way forward. In the US, Boston’s “Big Dig” created a centrepiece 12-hectare (29-acre) site of parks and boulevards by burying an elevated highway in tunnels. In Europe, the Madrid Rio project “disappeared” in a similar way, creating a huge new 10km-long urban park. In Asia, Seoul has created a 40-hectare public recreation space in the city centre, on the site of a stream that was covered over with roads during rapid postwar development. More recently, Paris announced plans for 650km of “post-lockdown” cycleways.
Neighbourhoods have seen a resurgence in appeal with the tag of “the 15-minute city”. The ideal of being able to live, work, sleep, shop, dine, be educated, entertain and be entertained – with all the venues for as many of those activities as possible to be within walking distance of each other. The attraction of neighbourhood living is not new, but it has been given a timely and welcome boost by the pandemic. It is now opportune to build on that through a combination of design interventions and the politics of zoning.
These dense communities have not seen higher infection rates, rather the problem is dense cramped households, whether within cities or suburbs – an issue before the pandemic. Affordable accommodation remains a challenge and is inseparable from the plight of homeless people.
Issues of agriculture could also help transform our cities into even more green enclaves. Urban farming of vegetables, using hydroponics, could deliver fresh food, cheaper and more flavourful, with higher yields and a fraction of the use of precious water – all delivered on the urban doorstep, a new version of the farmers’ market. An obsolete multistorey car park is the ideal urban farm. In the quest for the self-sustaining city, holistic thinking that cuts across traditional bureaucracies is needed (the conversion of waste to energy is a good example). In the move to greater autonomy we need to question the traditional power grid, which, for example, saw 2.5 million Californians without electricity last summer.
In the bigger picture, globalisation has lifted huge segments of humanity out of poverty, but it is not without the dire consequences of localised rust belts. Will the economic challenges of a pandemic lead to fewer and bigger, in the art of survival? The hope is a better balance – shared global action on the big environmental and health issues, and local action in the making, growing and powering of our connected societies.
• Norman Foster is an architect