QUE SERA SERA? .......

........ No, que pourrait être.

 I mentioned that The Old Girl is going to work from home next year. She will set up an office in our study.

This is becoming quite common in her industry and gained momentum after the COVID-19 lockdown earlier this year. Many companies are allowing their employees to do this and have discovered that not only can employees be trusted to work remotely, productivity is often increased with there being no down-time in travel and 'nonessential  workplace interaction- - tea breaks, gossip, corridor conversations etc.

Another spin-off for employers is that the amount of expensive office space that they have had to buy or pay rent for is no longer needed and they can 'downsize' in real estate, fixtures and fittings, company vehicles and a raft of other things  while keeping the business going and as a consequence improve the bottom line.

Yesterday I watched a segment on the news about the effect that this is having on commercial and retail real estate in cities. Office space, which used to be at a premium in terms of demand and cost is now hard for real estate agents to sell and lease.

Here are a couple of articles that touch on this change.

REMOTE WORKING FREES UP OFFICE SPACE IN NZ CITIES

THE IMPACT OF REMOTE WORKING ON COMMERCIAL REAL ESTATE 

Walking around Wellington last evening I looked at the many buildings and wondered what will happen to them if the trends of remote working, downsizing and online retail continues to grow.

Banks, public offices, insurance companies, telecommunication companies for years now have downsized their staff and operations preferring customers to interact with them via phone and internet rather than face to face. Online retail has exploded in New Zealand as it has around the world threatening city retail outlets. Now, with a large percentage of office-based workers likely to work remotely and/or at home many of these buildings - from top to bottom- will face the prospect of being empty.

The buildings that have multi-floors and many offices are in a better position to be adapted to accomodation, particularly the older and more solid constructions like banks, insurance companies, finance companies and public sector operations. Often these are attractively designed, have high ceilings and larger office layouts. It's the more modern glass and metal knock-ups that may become knock-downs. Inner city living has become more popular in this millennium and, with expensive housing and a national shortage of accomodation, particularly in the big cities, a conversion of office space to accommodation is both possible and desirable. As new accommodation will have to be built anyway it's a good idea to use existing 'footprints' to do so. This will ensure that the life of the urban environment will be maintained with shops, restaurants and services being needed.

There are however, only so many cafes, restaurants, food halls and telecommunication kiosks that can be sustainable and a very big risk that existing shops and retail fronts on the best streets in Auckland, Wellington and other cities (Christchurch rebuild is looking to invite inner-city living in a much bigger way than it was pre-earthquake) will be closed and remain unused.

This could result in cities becoming  boarded up, no-go zones like the worst of USA cities and International war-zones which will counteract any advantages coming from more people living in the cities (gentrification).

It is possible, in the future, that retailers who have been driven out of the cities to strip-malls and suburban shopping centres (malls etc) could come back into the city if commercial rents are reduced but, as I mentioned before, their sales model has been changed with the rise of online retailing.

Some serious and tangential thinking needs to be done on how best to maintain the cities' shopfronts and 'retail' presence with vibrant and attractive businesses and not rely on pop-up stores, Two Dollar shops, junk shops, instant finance outlets and convenience stores.

Like this:

Melbourne

And not like this:

Buffalo, NY, USA