No one will be surprised if the current coronavirus pandemic also brings about changes in the world of work. The pandemic is forcing many companies to accelerate their digitalization efforts, which would probably not have happened to this extent so quickly otherwise.
Employees are becoming more digitally confident while working from home, virtual meetings are currently replacing face-to-face meetings, discussions are becoming more efficient, and conversations are getting to the point more quickly. Overall, to the great surprise of many, the current transition has made some companies more efficient and focused—at least for now.
many employees lack the appropriate equipment and workspace when working from home. Especially in metropolitan areas, where every square meter counts and rents are high, there is a lack of financial resources to adapt these spaces. In some cases, peak rents for residential properties are higher than for offices in comparable locations. Employees are therefore increasingly missing their professional and familiar working environment and, for example, a stable internet connection. Above all, however, they lack the most important social contact point – meeting people in person at the office or the otherwise so important office grapevine. Home office should therefore be seen as a supplement and not as a complete replacement for the traditional office environment," says Uwe Mortag, managing director of Larbig & Mortag Immobilien.
Companies are realizing that office space can be used better or differently and that some office space no longer needs to be maintained. However, this will only become apparent in the medium term and will change the demand and requirements for office space. At present, demand for office real estate has fallen due to the coronavirus pandemic and uncertainty about the future economic development. However, there are no clear signs that companies will completely change their working practices in the short to medium term. We therefore assume that flexible working from home will continue to be only an additional option in the future. Only working in the office can truly unlock the long-term potential of communication, employee loyalty, and teamwork.
It is currently impossible to predict how the predicted recession will affect the office real estate market. The current situation is characterized by great uncertainty. Many companies in the Cologne/Bonn area have put non-essential projects on hold until the initial effects of the coronavirus pandemic have been overcome and they are in a better position to assess their own economic development. At the same time, landlords must prepare for issues such as terminations, rent deferrals, and the search for new tenants or subtenants.
The coronavirus pandemic caught us all unprepared – but it has hit a real estate market in Germany, and particularly in Cologne, with a vacancy rate of only around 2.4 percent, which is characterized by significant excess demand. We therefore assume that the coronavirus pandemic will primarily lead to a correction in demand. In order to get through this crisis with our customers in the best possible way, we at Larbig & Mortag have provided special training for our entire team and can now offer digital solutions such as virtual viewings, enabling us to continue to provide tenants and landlords with personal advice and support.
