- Academics predict $500bn "value destruction" in US offices
- Tough decisions ahead for office developers
On the evening of 23 March 2020, the way we thought about offices changed forever. White-collar businesses around the country were ordered to operate remotely – in many cases for the very first time – and they had a variety of experiences doing so. Some went back to the office almost immediately after the pandemic was over, observing that digital collaboration was no match for physical collaboration in their particular industry, some have had a slower and less absolute return to the office, and some have ditched the office altogether.
The complicated picture presents a continuing challenge for the world of office development. For decades, commercial landlords have made billions by building high-end office space in cities such as London and letting it to large multinational corporations on long leases. But the pandemic has called into question the basics of this model: existential questions over office space, specifically how much of it we need and of what it should comprise, are now paramount. The future of office development will define not just the fates of the publicly listed developers who depend on the model – such as British Land (BLND), Land Securities (LAND), Derwent London (DLN) and Helical (HLCL) – but the future of work.