As I write this many are hopeful for a return to something like normality in the second half of this year, and as such I’ve been giving some thought to the future of the real estate industry and the future of work.

Shifting work patterns – there’s no return to March 2020

I’ve spoken before about how the pandemic has accelerated the shift towards flexible working and how employees will increasingly expect their employer to be nimbler and more considerate about their work life balance and setup. As many begin to contemplate a ‘return to the office’ it’s clear these trends are here to stay. There is no return to the world of work we left in March 2020. 

In my view businesses that adapt to the new way of working will see themselves less attached to physical locations but rather as a network of hubs and spokes with employees working from almost anywhere that the job can be done effectively. This will take place not just because the technology exists to enable it, but also because employees will increasingly demand the flexibility that this offers in terms of working patterns and lifestyles. The companies that will prosper in this new environment will be those that can adapt to the changes and get creative with the implications of remote working – and therefore attract the best talent from a wider pool than ever before.

This will also have positive impacts on diversity and inclusion at businesses that adapt effectively, in my view, as flexibility and the reduction in geographical limits to recruitment will broaden the scope of those who can join businesses.

Ramifications for real estate

What does all this mean for the real estate industry as providers of the spaces in which businesses will need to adapt to these trends, and as one of the biggest asset classes in the world in terms of space, size and reach?

Put simply, the industry is experiencing its greatest change for decades.

From a social standpoint, the shift in working patterns will require significant adaptation from the real estate sector. The trend towards de-densification of office space and the removal for many businesses of having a set of core physical office locations will mean demand for spaces will increasingly move away from CBDs, as workers will demand shorter commutes and better uses of office space than had previously been the norm.

Finally, I believe the standard model of many real estate businesses, which is to finance a building and step away from the active day to day management of their assets will quickly become a thing of the past and businesses such as Sirius, which consider the whole spectrum of a space right the way through to its end users in the form of our tenants’ employees and what their demands and needs are, will be quickest to adapt and thrive in the new environment.

Sirius adapting to the changes

Our flexible platform and intensive asset management places us well to adapt to these trends. We have a diverse range of tenant industries and sizes as well as a wide range of spaces, and as such we can be agile and responsive to shifts not just in what tenants ask of us, but also what their employees ask of them.

Another advantage of this diverse tenant base is that we get insight into changing work patterns across a wide range of industries, which enables us to bring this insight to bear in helping tenants in other areas or industries understand where best to change their own spaces and working patterns. We can also add value through the varied nature of our sites, meeting employee demand for a range of spaces such as larger communal areas and meeting spaces, and a significant amount of green space at many of our edge of city sites.  

For Sirius as an employer, we see ourselves as a national network with over 70 sites across Germany covering the major economic centres and key strategic towns – allowing our team to work flexibly from anywhere in the network that the job can be done. Going forward, we expect this to help us attract and retain a more diverse range of talent.

Changing circumstances requiring different leadership

On a personal level, this also has ramifications for how I and the leadership team here at Sirius will lead the business and our teams as we step back into the new normal. We’ve been walking the walk ourselves, working from across Germany and Europe and empowering our employees to choose how they can be flexible around work to best suit their own lifestyles.

The new normal will require a shift in leadership styles away from command and control towards more trust, empathy and emotional intelligence to help remote staff work together to get the job done, and to better communicate with teams spread across locations to maintain trust and credibility throughout the workforce as a whole.

Of course, we know that offices are just one part of the equation, in my next update I’ll discuss my view on how the shifts in working patterns will manifest themselves in certain industries like the light industrial sector.