CBRE Korea Special Report - The Future is Flexible: The Evolution of work and the office in Korea
The COVID-19 pandemic is set to have a significant impact on the Seoul office market this year and beyond as issues ranging from slower economic growth, concerns over workplace hygiene and density and the increased adoption of remote working influence leasing activity. Significant new Grade A supply will place an additional burden on market fundamentals.
With transmission of the virus frequently occurring among groups of people in enclosed spaces, the office has been identified as a location with an elevated level of risk. Coworking centres and Activity-Based Working (ABW) environments that typically feature unassigned seating, relatively high density and close interaction between users have been the subject of scrutiny
In the coworking sector, many operators have been forced to postpone tours for potential new tenants and delay events. However, there have been no major cases of corporate tenants cancelling memberships or returning space. While operators will need to enhance workplace safety and facilitate social distancing, the outlook for the sector remains bright.
Korea’s experiment with remote working has proved to be largely successful, with companies reporting higher employee satisfaction, increased cost savings and similar productivity. This could encourage companies to permit employees to work remotely more frequently and on a larger scale in future.
Despite the anticipated shift to remote working, CBRE believes employees will continue to demand ABW workplace providing a variety of different settings to facilitate different working styles. Companies prepared to invest in and manage this transformation – as well as augmenting hygiene and safety measures in response to the pandemic - will reap myriad benefits from a more productive, inspired and loyal workforce.
While these trends may lead to a decline in office footprint requirements in the long term, the nature of most industries’ business means they will retain a strong need for physical office space. The coming years are likely to see office occupiers in Korea adopt a rationalised physical footprint comprised of a range of high quality, well equipped spaces to support employee and business needs.
These spaces will be enhanced by technology, feature a strong focus on health, wellness and amenities and be facilitated by leading edge workplace design. In the medium to longer term, there may even be an increase in space requirements from companies needing to comply with social distancing guidelines, which would require more office space per employee.