The penny has dropped: Failing hot desking fad will benefit commercial investors

In an article last year, I flagged the growing trend of “hot desking” among mid- to larger-business services firms employing our knowledge workers, around Australia.

This trend (since the early 1990s) has been driven by the inevitable cost savings — resulting from a reduction in their office space requirements.

And if this trend were to continue it would clearly have the potential to adversely affect the overall demand for office space going forward.

However, a recent article challenged the underlying wisdom of this penny-pinching fad.

First, the logic

The current rationale contends that by replacing individual offices with workstations (even removing the dividers), this significantly reduces the space requirement per employee. At the same time, the aim is to improve staff collaboration.

And now many of these firms are simply issuing their staff with a mobile phone, a laptop and a locker, adopting a “virtual office” and “clean-desk” policy — where you (as an employee) have no fixed location within the office from one day to the next.

What does the latest research reveal?

Diane Hoskins (of big US office design firm, Gensler) has researched 90,000 people, from 155 companies, across 10 industries.

As a result, her team found that Knowledge Work comprised four separate functions:

  • Focus (individual work involving concentration and attention to a particular task);

  • Collaboration (working with others to achieve a goal);

  • Learning (acquiring knowledge or skill through education or experience); and

  • Socialising (interactions to create trust, bonds and values, collective identity and productive relationships).

What they discovered was that collaboration was not the most significant factor in workplace effectiveness. Rather, it was individual work focus!

Furthermore, they found that these new-style office layouts actually make focus virtually impossible.

Instead, workers experienced constant “interruptions, auditory and visual distractions (which) all combine to make focus the modern office’s most compromised work mode.”

Bottom line: This is great news for commercial property investors.

While current office design seeks to improve collaboration, it actually sacrifices individual focus. Thereby, reducing worker efficiency — resulting in far lower productivity overall.

Apparently, the Gensler research also found that workers who can focus effectively are able to do the following things more effectively in the workplace:

  • 57% more able to collaborate;

  • 88% more able to learn; and

  • 42% more able to socialise.

As the penny starts to drop, more and more firms will begin reverting back to a more conventional (larger) office layout.

And therefore, you will see demand for office space accelerate over the next three to four years — with a resultant increase in both rentals and capital values.


Chris Lang is an advisor to commercial property investors, sell-out author and regular speaker on how to invest in commercial property. You can visit his website Property Edge Australia to help you get the most out of your commercial property investing.

This article originally appeared on Commercial Property Made Easy.

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