The FINANCIAL -- Investors seeking ways to future-proof office assets can do so by considering incorporating space for gyms, nutritionists and medical consultation centres, as JLL research finds that space dedicated to health and wellbeing has the most significant potential impact on employee performance.
The findings come from JLL’s new report Workplace – powered by Human Experience: an investor perspective which builds on the 2017 flagship occupier survey Workplace – powered by Human Experience, which surveyed more than 7,300 employees globally to understand how real estate and workplace experience can be used to drive business performance and enhance engagement, empowerment and fulfilment among staff. This investor perspective extracts some of the key findings from this survey to highlight what the new age of human experience means for assets, portfolios and investment strategies, and what investors can do to get ahead.
Peter Hensby, regional director in JLL’s EMEA Office Capital Markets team, said: “Never before have investors and developers had to more deeply understand how companies use the workplace, and how their employees behave in it. Happy, healthy employees should help to underpin reduced tenant turnover and stronger rental returns. The most competitive offices will be those with an open dialogue between landlords, tenants and employees as the world of work continues to evolve.”
Key insights from the report:
Demand for flexible space is found widely, but there’s no one-size-fits-all solution. Flexible working practices are well ingrained in China and the US - 58% and 49% of employees spend more than one day per month working in places other than the traditional workplace - but less so in Japan (22%) and France (19%)*. Savvy investors will cater to new ways of working, operate a flexible platform and understand local market nuances.
Investors can gain a competitive edge by supporting tenants in the war for talent. Health and wellbeing space and community space in the workplace will potentially best attract employees, with co-working spaces having the biggest impact on talent retention*. Investors can support tenants by providing a mix of collaborative spaces and innovative areas which blur work, life and play and, at the same time, benefit from additional income as user demand fluctuates between peak and off-peak office hours.
Employee satisfaction, performance and wellbeing are the new measures of success. With only 51% of employees said their workspace allows them to work completely effectively*, companies are prioritising the experience and performance of their staff. For investors, this means that traditional measures of success will no longer tell the full story, and will need to be supplemented with measures of employee satisfaction. These will provide handlebars to influence the metrics that matter: rental income, occupancy and cap/op expenses.
“These employee demands are filtering through to investment strategies and investors are now focusing on the assets which will attract the right talent in the future,” said Hensby.