We’re all expecting less, but will we actually get more?

Most commentators expect the COVID-19 crisis to lead an inevitable fall in demand for office space and an increase in home working. But what if this much predicted less actually becomes more?

Fewer people may be in the office at any one time, but social distancing may work against any meaningful reduction in the space occupiers need. In fact, to make the office experience reasonably comfortable and to allow for safe social distancing (checker-board desk patterns, barriers, larger meeting rooms etc.) much bigger footprints may be required.In recent years, the end user or customer experience has been a key focus across the office, retail and leisure sectors. It will become even more important now, as we all emerge from lockdown wanting to experience life’s social pleasures again, but safely and at (more than) arm’s length.

Pubs will need sites with more indoor space and bigger beer gardens. Retailers will need more spacious shop floors to enable safe and easy customer flow. Residential and urban developers will refocus on the benefits of larger gardens and high-quality open spaces.The days of landlords and occupiers packing it in to make it pay surely cannot continue. But it won’t be easy to change in the cash-strapped economy COVID-19 is creating. So the evolution to socially distanced space may happen in two stages. The COVID-19 contraction will probably see occupiers trying to reduce (and take less) space to relieve urgent cost base pressure. Over the next 12 months, this may bring a fall in demand for space and in rental levels. Perhaps that constrained market will give landlords and tenants the chance to cooperate to create enhanced, bespoke spaces catering for the risk of COVID-19 and of future pandemics and public health crises.

If the industry fails to achieve this sort of consensus, the transition from the COVID-19 crisis to the “new normal” could be much more patchy and painful. Occupiers may not have the appetite (or means) to pay for more space at current rental levels, especially off lower volumes and turnovers. On the other side of the lease, landlords are likely to resist lower rents or switches to turnover in markets where tenants’ turnover and volumes may already be much reduced.

If landlords and occupiers can work together to avoid the worst of the COVID-19 crisis, and then seize the opportunities it brings, they can create a new market for innovative space. Ultimately, occupiers may pay a premium for socially distanced space and add-on services. Working from home might increase, but businesses will always need strong, safe spaces to meet clients and customers, train and develop staff and reinforce team cohesion.

We have seen the future. It needs to be more spacious and flexible. Landlords and occupiers should work together to deliver it. We did not ask for the virus, but we can make sure that our answers to it are full of optimism and innovation.