Estate agent Savills say they believe massive numbers of global workers leaving their offices to work from home due to Covid-19 will not reduce demand for office space once the crisis passes.
They said that while the impact on remote working is unclear there will still be a requirement for new offices. “On one hand the concept may gain more widespread traction due to enforced working from home during the crisis period, potentially feeding-in to a greater long-run demand for co-working desks.”
“On the other hand the benefits of an office environment, in terms of collaboration and the immediacy of personal contact, may actually be proved by this crisis,” Savills said in a research note to its clients today.
"So the Monday-Thursday desk requirement remains unaltered.”
Savills has a large presence in Asia with 58 offices in the region including Wuhan where the virus first emerged.
Asia also had experience with the SARS virus in 2003 and staff in Savills helped prepare the research note to share some of their experiences on the economic impact and recovery from Covid-19.
The virus appears to be under control in China and the economy there is reported to be back to 80% capacity and all Savills offices have reopened except for Wuhan.
“Based on the preliminary evidence, the pandemic appears to be controllable within a two-quarter timeframe, conditional on an appropriate public policy response and social compliance,” the research note states.
Savills said the office real estate sector has seen short term paralysis in leasing due to the sharp slowdown in economic activity and delayed business decisions.
“Early evidence from Asia is that this can be followed by a fairly rapid rebound in confidence and activity post-crisis. Given the key role of US multinationals, the overall impact on demand for business space in Dublin depends on the extent to which Coronavirus can be contained in America.”
The report also warns that small retailers that go out of business due to the virus may lead to a long-term reduction in demand for retail space that will take time to claw back.
“While Ireland can clearly not avoid major disruption as a result of coronavirus the situation is as good as it could realistically be. The Government acted swiftly and decisively to implement a coherent management plan in line with WHO guidance. Sufficient fiscal space existed for a robust fiscal response and the Government has also acted decisively in deploying a large stimulus.”