The impact of the Work from Home trend caused by the Covid-19 pandemic is "overhyped, with disillusionment expected as the hype cycle plays out".
The Office market has shown significant returns, the reality is that all key markets are oversupplied, with the Office most affected.
The truth of this trend will play out somewhere in the middle. This is according to FNB economist John Loos, who says WFH has been rising for a few decade, "as time has gone by mobility has gotten better and better".
He says a significant portion of the workforce is expected to return, despite the abnormal spike sped up by Covid-19 as a "forced test".
'Office demand threatened by WFH'
"The WFH experiment was a great success at a time when financially pressured companies need to focus on cost. It was a big opportunity to reduce office space needs. We thus assume that the long term increasing WFH trend will accelerate, placing further pressure on office demand.
According to Loos, "WFH doesn’t only involve increase in full time WFH but also in office bound employees spending larger portions of their time WFH."
He also expects "hot desking to increase".
"Management of companies really got the thinking going about better utilisation of space. Like reserved parking spots, these should be long gone.
In the latest FNB Broker survey, as part of it he FNB Commercial Property Finance Update 2021 Market Update strongly points to company revising downgrading of office space.
"Reduction of office space requirements and the reconfiguration still expected. Companies who have never previously thought about collaboration, will be looking at repurposing for different uses of the office environment."
Loos also believes this is an opportunity for affordable housing to be factored into repurposing vacant CBD buildings.
While KwaZulu-Natal's Durban has been able to assimilate this trend far better to stem the urban decay of its City Centre, the reality is that there is possibly too much high-end residential accommodation, in markets like Gauteng's Sandton and the Western Cape's sought-after Cape Town and surrounding high-end markets.
"Values need to drop significantly, with vacant buildings being repurposed into affordable housing."
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