Hot Desking: The new work trend threatens offices

Hot Desking: The new work trend threatens offices
Hot Desking: The new work trend threatens offices

Remote work and flexible forms that emerged during and after the pandemic threatened the office real estate market for quite a long time. Until the moment when it was decided to completely lift the restrictions due to Covid-19 and return to physical workplaces, at which point the market started to heat up with offices gaining life again.

Within this reality, the trend of hot desking, which is inextricably linked to hybrid work models, is coming to change the facts and balances again, threatening the office market.

That’s what Morgan Stanley analysts told the Los Angeles Daily News, citing a new casual approach to the allocation of offices to workplaces that poses risks for the office building market.

The real estate sector has also suffered this year as interest rates have soared, while commercial and real estate firms struggle to manage the shift to hybrid working models.

“Along with working from home, hot desking is emerging as one of the most structurally damaging problems facing the office market today,” noted Morgan Stanley analyst Sebastian Isola.

“If adopted more widely, the reduction in requirements for more square meters would likely have a significant even greater impact on occupational demand,” he added.

What is hot desking?

The sharing of positions and offices by several employees, without assigning an office to a specific employee, is a method that seemed ideal for hybrid workplaces – some working on-site and some remotely – it promotes collaboration, at the same time which helps to reduce costs and manage even the most limited space.

On the contrary, it creates a disconnected relationship with work and the company, while weakening the logic of hierarchy and work structure, along with problems of hygiene, well-being and concentration that ensure the stability of the workplace.

However, it appears to be more prevalent in the UK, according to research conducted by Morgan Stanley.

Among respondents in the UK, 30% say this particular working model was implemented during the coronavirus pandemic – indicating they were already familiar in previous years – compared to around 20% in Germany and France and only 13% in the US.

But despite Britain’s informal office politics and work-from-home practices, Morgan Stanley still favors London-focused office stocks. Owners gravitate towards amenity-rich city center locations, maintaining ratings on Derwent London Plc, Great Portland Estates Plc and British Land Co. Plc.

All three stocks have suffered double-digit percentage declines this year as higher interest rates fuel concerns about debt servicing costs and asset valuations.

Source OT

The article is in Greek

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