#71 - 12 March 2021

The future of offices, plural

“Rumors of my death have been greatly exaggerated”: the line is famously attributed to Mark Twain, but it might as well be office spaces speaking; over the past few months, countless headlines have predicted the decline of the workplace. It is true, after all, that many factors now point to major changes to come in commercial real estate. First of all, the spread of telework and its adoption by those who have been forced to work remotely ever since the beginning of the pandemic: last month, the annual Telework 2021 barometer conducted by Malakoff Humanis (in French) showed that 86% of teleworkers wished to continue working remotely two days per week. These aspirations, widely commented in the media, have been fueling catastrophic announcements about the future of offices for months. At the same time, the economic crisis and the prospect of a possible downsize of their workforce seem to have convinced some companies that it is time to take the plunge and reduce the size of their offices or the number of workstations.

But while it is difficult to make reliable predictions in times of crisis, the exercise becomes impossible when offices are considered as a monolithic category. The commercial real estate market is complex and disparate, and while certain types of office space are less in demand today than they were in the past (in La Défense, near Paris, new offices are less likely to be rented than they were before the crisis), this is not the case for "the office" in the broadest sense. Thus, for Robin Rivaton, Investment Director in IdInvest's venture capital team, it is the obsolete office buildings located on the border of the major metropolitan areas that are likely to suffer the most from the crisis; premium office space located in tense areas is likely to remain highly prized. And while the average office space may indeed decrease in the future, this evolution is not necessarily synonymous with a decrease in prices, notes Robin Rivaton. For example, the average office space per employee in North America fell by a third between 2010 and 2017 without a proportional fall in prices, which even rose sharply in the most expensive areas. This potential decrease in the average surface area of office space should be spread out over time, so that the market should be able to absorb it, according to Robin Rivaton. While the crisis does not mark the disappearance or even the decline of office space, it could however give rise to new uses and expectations on the part of companies and employees alike, and to which the players in the sector will have to provide new responses. – Marie Baléo, Head of Studies and Publications

 

No time to read? La Fabrique de la Cité has got you covered.

“ACT NOW” – As the Biden administration is set to announce a new greenhouse gas (GHG) reduction target for the United States on April 22, environmental groups are calling on the U.S. president to cut emissions by 50% by 2030 so that other countries will follow suit. Since cities “account for more than 70% of global CO2 emissions”, they will play an essential role in achieving carbon neutrality goals. What will low-carbon cities look like and how will they operate? – Sarah Cosatto, Research Officer

→ Related: discover our study project on the post-carbon city and stay tuned to read our forthcoming report on the decarbonization strategies of cities around the world.


BLACKOUT IN TEXAS: “IT'S POLITICS, STUPID” – Last month, Texans had a bitter experience of what resilience is all about... when it's not there. As suggested by economists Claude Crampes and Stefan Ambec of the Toulouse School of Economics, when technical systems fail, it is not the climate but economic and political choices that are at the root of the disaster. The current search for the ideal scapegoat in the Texas episode reminds us that, although it is embodied in technical choices, resilience is by nature a political process. Will this be remembered for the next snowstorms and other, say, health crises? – Cécile Maisonneuve, President

→ Related: our publications on urban resilience, a new imperative for territorial policies.


REVITALIZING THE CENTER TO REDUCE GHG EMISSIONS? – There is cause for concern: GHG emissions linked to commuting increased by 18% in French medium-sized towns between 2006 and 2016. A study of 113 medium-sized French towns shows that revitalizing the town center will not be enough to reverse the trend: no revitalization indicator has a simultaneously positive effect in the center and in the suburbs on mobility behavior, that is to say on the reduction in the use of cars and the reduction in distances travelled. – Chloë Voisin-Bormuth, Director of Research

→ Related: our note on the trajectories of medium-sized cities (in French).


SMART, SMARTER? – The pandemic has led observers to wonder whether we will be hearing a lot less about smart cities in the months to come, as municipal budgets are under high pressure, and also to what extent “smart” and its applications on the ground will evolve. In New Orleans, elected officials intend to accelerate rather than abandon the implementation of their take on the “smart city”, by involving citizens in smart city planning and “’reimagining’ [...] how the city interacts with the public and consumes feedback”. – Sarah Cosatto

→ Related: our conversation with Fabien Clavier, researcher at the Future Cities Laboratory (ETH Zurich), and Yasser Helmy, Cisco Smart Cities Director, about Singapore’s smart city model and program.


DECARBONIZATION AND CITIES – By 2050, even if an estimated 60% of new vehicles sold are electric, the majority of cars will still be internal combustion engine (ICE) vehicles, which is not enough to achieve the announced carbon mitigation objectives set by national governments. This observation leads us to consider other effective mechanisms to reduce emissions such as… city planning. – Camille Combe, Project Manager

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