The Day After, Challenges Facing The Office Space Market

The Day After Covid-19 pandemic time is approaching. It is bringing with it multiple challenges for the companies’ office space market. Many companies, regardless of their size and number of employees, had to allow part of their work force to work from home and everybody to work from home in some cases. The results of this approach are beginning to appear and they will be changing the way of doing business in many companies. The cost for transportation, utilities and services decreased significantly, but not the rents!

 The challenges:

As Offices were open for limited numbers of staff or even closed, Multiple future decisions need to be addressed. Having less people in the office due to work from home means less office space needed. In a recent research we did at LOTUS Management (results will be published soon), the majority of the surveyed companies are considering decreasing the office space they currently occupy as they plan to rely more on working from home options for their employees. A good portion of these companies are also planning to have more Social Distancing requirements, which will require remodeling the current shared office areas to allow more space per employee.

Landlords, tenants and service providers will have to review carefully the situation to reach a win-win relationship for the rest of the rent contracts. The new contracts will take into consideration these new factors.

Conclusion and recommendation:

The Real Estate cost including services and utilities as a cost center on the P&L of Companies will be different in 2021. Companies need to study carefully the required changes that need to be done to reduce them while allowing a better and more efficient business environment for their Staff. Our team at LOTUS Management is ready to help Companies in assessing the needed changes with different options and solutions based on each companies’ objectives.

 Cairo, May 11th, 2020

Amr M. Aboualam

Founded in 2013, LOTUS Management and Consulting started operation to meet the demand for structured and efficient management of real estate investments and assets. LOTUS specializes in consulting and market studies, Portfolio creation and management of mixed-use projects, commercial and retail Properties, and deal negotiation representation

Copyright ? 2020 LOTUS Management