06 April 2021

Building Tomorrow’s Office: Safe, Sustainable, Scalable

Building Tomorrow’s Office: Safe, Sustainable, Scalable

The impact of the Covid-19 pandemic and pressing climate concerns have accelerated an ongoing shift in work patterns and company priorities – and are driving a sea change in the design and construction of tomorrow’s office buildings.

The abrupt move to remote work in 2020 effectively broke a nine-to-five mold that had already begun to loosen, and the resulting flexible work arrangements and fluidity between home and office are likely here to stay. Yet what’s also clear, both from what we’re hearing from our own clients and from various high-profile surveys, is that the majority of workers in developed countries are eager to return to the office1 at least some of the time.

In this period of flux, the operating word in office design has become flexibility. The office remains central to companies’ workplace culture, brand identity, and client experience. But with remote work moving from a perk to standard operating procedure, the future office may need to serve different roles for different companies and different workers. In the post-Covid era, it will be even more critical to provide safe and attractive spaces with appealing amenities. And with many companies looking to reduce their carbon footprints, efficient and sustainable design, with the scalability to adapt to changing needs, will be key.

Here, PineBridge Benson Elliot discusses what current development projects are signaling about the office of the future – and what we believe today’s tenants are looking for to create ‘destination offices’ for employees and clients.

Tomorrow’s office today: safe, sustainable, and scalable

The recent enforced break from the workplace has made clear that while remote work has been successful by a number of measures,2 the office environment remains critical in some important areas. A big one is advancing the careers of younger or more junior staff. In-person work helps to build strong personal relationships, enabling the informal interactions that break down hierarchies and help newer employees develop their careers.3 Stimulating innovation is another: Many companies (especially in the tech sector) have long designed offices that facilitate impromptu conversations that can spur ideas. And no less critically, well-designed offices can create a much-needed social environment. Many office workers have cited socializing with colleagues in person4 as the thing they miss most following the abrupt shift to remote work last year.

The office isn’t going anywhere, but it must adapt. In our experience working with tenants in major cities in Europe and the UK, clients are increasingly looking for bespoke offices tailored to the needs of a company’s corporate culture, with three critical areas of focus:

  1. Safety, health, and well-being. Beyond steps to keep employees safe and comfortable, evidence that happy employees may be more productive5 (among other benefits) means that the best offices will go further to contribute to overall well-being.

  2. Sustainable, environmentally conscious design. In a world increasingly alarmed by the effects of climate change, companies want to do their part – and their choice of office space can help (or hurt) efforts to reduce their environmental footprint or meet other ESG goals.

  3. Scalable, forward-looking construction. Designing highly efficient buildings that avoid built-in obsolescence, with the ability to scale usable space up or down and adapt it to meet changing needs, is key.

The Covid pandemic has accelerated obsolescence in certain secondary offices and those with poor ventilation systems, congestion issues (such as slow elevators or lifts or poor staircase access), and limited flexibility to adapt to changing usage needs. While these issues may not consign a dated office building to demolition, they may necessitate major cut-and-carve refurbishment – an area in which we have significant experience after having successfully upgraded major business parks, skyscrapers, and several ‘green-labelled’ office towers.

Safer, healthier offices: going beyond the basics

The pandemic has trained a lens on the steps companies are taking to safely bring employees back into the office. We believe the design of future office spaces must begin by incorporating certain fundamental elements that promote a healthier workplace.

Better congestion control
The desire for comfortable social distancing is a near-term concern that will likely persist to some degree even after the pandemic fades. To this end, ensuring a sufficient number of elevators or lifts has become more critical, and high-speed ‘smart’ elevators can allow people to move more quickly through buildings while reducing the number of passengers in these confined spaces. Large, open lobbies and waiting areas with a clear flow are another design element that can reduce congestions and make employees and visitors more comfortable. Additionally, opening up staircases and making them visible in lobbies and other areas – as opposed to hiding them for use primarily as fire escapes – can encourage their regular use, especially in low-rise buildings or on the lower floors of taller buildings, helping avoid crowding in elevators and lifts. Similarly, thoughtful design of access and egress points from the building, particularly the creation of one-way routes and separate entry and exit points, can help reduce congestion. Companies are also looking to increase the distance between desks and to create separate breakout spaces that allow people to work collaboratively.

Improving air quality
Concerns about the potential dangers of recirculated air have become more prominent during the pandemic. Steps to ensure healthier air within office buildings include installing or upgrading fresh-air systems to filter airborne bacteria and viruses or improving natural ventilation (for instance, by installing windows that can be opened).

Reducing touchpoints
‘Touchless’ technology is now in wider use in office buildings, including holographic elevator and lift buttons that reduce common touchpoints. Clients are also commonly requesting smart technologies such as apps to control entrance and exit turnstiles, along with ultraviolet disinfection systems for elevators and lifts, body temperature scanners, and bacteria-resistant materials like copper in high traffic areas.

Many of the measures noted above address guidance from the Well Building Institute’s WELL v2 building standards,6 which we’re focused on implementing for all projects going forward. Yet we are aiming even higher, with efforts to more fully embrace both green and ‘biophilic’ office design – distinct but overlapping concepts that continue to gain momentum and feature prominently in many of our recent development projects.

The biophilic office: bringing the outside in (and the inside out)
Most would likely agree that access to nature or the incorporation of natural elements create a more appealing workplace. And with studies demonstrating enhanced physical and mental performance7 for employees with greater connectivity to nature, access to green space at work has become an area of focus and spurred interest in so-called ‘biophilic offices’ – structures that take advantage of natural light, thoughtful landscaping, and the incorporation of plants and other organic elements to enhance the office experience for employees and clients. Biophilic design has been an area of focus for our firm for a number of years and continues to gain traction, with Covid-19 and the related desire for open-air meeting and workspaces accelerating its adoption.

Maximizing outdoor space
In all of our designs, we aim to make external spaces as flexible and usable as possible to ensure that they add the most value. Outdoor meeting pods, dining options such as food trucks, and recreation options like table tennis are all effective and economical ways to encourage and maximize the use of outdoor spaces. Features such as rooftop terraces, external pavilions, and landscaped ground-floor exterior spaces allow for attractive meeting areas and places for employees to enjoy lunch or coffee breaks. Meetings can be held outside in the warmer months, which can extend for most of the year in more temperate climates.

Green design: form and function meet sustainability

We’re also highly focused on sustainable design, and that begins with the choice of building materials. Cross-laminated timber (CLT), for instance, is much more environmentally friendly than the more traditional concrete, due in large part to the amount of embodied carbon in wood. In fact, the carbon offset of using a cross-laminated timber structure compared to concrete is so great that a building developed in London in 2017 saved 2,400 tons of carbon compared to an equivalent block with a concrete frame.5 And these structures can now be built high: The tallest CLT building in the world, completed in Norway in 2019, stands at 85 meters.9

The holy grail: the zero-carbon building
While the zero-carbon office remains aspirational, we’re taking steps to bring us closer. For one, we are implementing a strategy for future designs that will use electricity (rather than gas) for heating and cooling – a critical shift given that electricity across Europe is increasingly being sourced sustainably. In the UK, for example, 40% of electricity is generated from sustainable sources.10 The adoption of air-source and ground-source heat pumps is another way to help bring the zero-carbon building from dream to reality.

The office evolution: from workstation to destination

The office is evolving rapidly, and investors in private real estate must look squarely at how changing usage patterns and priorities are driving the optimal design and construction of tomorrow’s office buildings.

Looking ahead, we believe the focus should be on creating highly flexible, grade-A office spaces that incorporate environmentally friendly design and natural elements. The ‘green office’ is here to stay: As responsible investors, it is incumbent on us to reduce our carbon footprint, and to help our clients do the same.

We believe office design that focuses on creating safe, attractive, sustainable spaces, while keeping an eye on the prize of zero-carbon construction, is a big step in the right direction – and will create offices that employees are eager to come back to.

Footnotes

1 Source: European Foundation for the Improvement of Living and Working Conditions. As of 14 January 2021. (Linked from: https://www.eurofound.europa.eu/data/covid-19/workingteleworking)
2 Source: Finder. As of 28 September 2020. (Linked from: https://www.finder.com/uk/workingfrom- home-statistics)
3 Source: Business Insider. As of 29 May 2020. (Linked from: https://www.businessinsider.com/ remote-work-pros-cons-younger-workers-gen-z-millennials-2020-5?r=US&IR=T)
4 Source: Cezanne HR. As of 5 June 2020. (Linked from: https://cezannehr.com/hrblog/ 2020/06/things-people-miss-about-the-office/)
5 Source: University of Oxford. As of 24 October 2019. (Linked from: https://www.ox.ac.uk/ news/2019-10-24-happy-workers-are-13-more-productive)
6 Source: Well Building Institute. As of Q1 2021. (Linked from: https://v2.wellcertified.com/wellv2/ en/overview)
7 Source: National Center for Biotechnology Information. As of 6 March 2013. (Linked from: https:// www.ncbi.nlm.nih.gov/pmc/articles/PMC3709294/)
8 Source: Architecture Media. As of 15 March 2017. (Linked from: https://architectureau.com/ articles/the-buildings-we-deserve-andrew-waugh-on-clt-construction/)
9 Source: Architect’s Journal. As of 2 April 2019. (Linked from: https://www.architectsjournal.co.uk/ news/norwegian-wood-voll-arkitekter-tower-named-worlds-tallest-timber-building)
10 Source: Department for Business, Energy & Industry Strategy. As of 22 December 2020 (Linked from: https://www.gov.uk/government/collections/energy-trends)


Disclosure

Investing involves risk, including possible loss of principal. The information presented herein is for illustrative purposes only and should not be considered reflective of any particular security, strategy, or investment product. It represents a general assessment of the markets at a specific time and is not a guarantee of future performance results or market movement. This material does not constitute investment, financial, legal, tax, or other advice; investment research or a product of any research department; an offer to sell, or the solicitation of an offer to purchase any security or interest in a fund; or a recommendation for any investment product or strategy. PineBridge Investments is not soliciting or recommending any action based on information in this document. Any opinions, projections, or forward-looking statements expressed herein are solely those of the author, may differ from the views or opinions expressed by other areas of PineBridge Investments, and are only for general informational purposes as of the date indicated. Views may be based on third-party data that has not been independently verified. PineBridge Investments does not approve of or endorse any re-publication or sharing of this material. You are solely responsible for deciding whether any investment product or strategy is appropriate for you based upon your investment goals, financial situation and tolerance for risk.

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