2024 will see many firms walking back flexible working arrangements in a bid to lure workers back into the office, according to property investment firm Castleforge.
In its latest research note, Castleforge predicts that 2024 will see a reversal of the post-pandemic trend of empty offices and increased levels of remote working.
Despite many commentators predicting a ‘remote-work revolution’, as increasingly flexible working arrangements continued long after the end of the Coronavirus pandemic, 2023 saw many firms begin to implement measures to encourage employees back into the office on a more regular basis.
Firms including Google, JP Morgan and even Zoom are requiring employees in the office for at least 3 days a week. These companies used to offer some of the most flexible remote work policies in the market, but executives and managers have grown concerned about the productivity of fully remote workforces.
Many workers themselves are also increasingly receptive to the idea of returning to the office. Castleforge polling of more than 1,800 office workers in winter 2023 found that some 59% of young workers (aged 18-24) said they worked less productively at home. 43% also reported feeling socially isolated while working away from the office and experienced negative effects from a lack of human interaction.
While 2023 saw the early signs of a return to the workplace, Castleforge’s research suggests we will see the return to office trend accelerate in 2024. Although the increased flexibility gained from the remote working environment of the pandemic is here to stay, many firms will no longer allow employees to work from home for most of the working week.
Michael Kovacs, Founding Partner of Castleforge, said, “It is becoming increasingly clear that predictions of the ‘end of the office’ were premature, even if we never fully return to pre-Covid ways of working and office attendance levels.
“While the positive aspects of flexible working arrangements will be retained, 2024 will see many employees called back to work from the office more days per week than we have seen in the past few years.
“Far from the collapse in demand for office buildings foretold by many, demand for high-quality, well-located office space remains strong, and rents for this type of space are over 20% higher than they were in 2019. Firms will increasingly look to premium amenities and convenient locations as benefits that will give employees a reason to be back at their desks.
While some workers may be reluctant to give up the comforts of home, offices which provide strong hospitality, diverse amenities, and a convenient location, can help to soften the blow of the daily commute.”
The big winners of this trend will likely be the office spaces that are able to provide the high-quality services and convenient locations that make the transition back to office life as easy as possible for workers.
Castleforge continues to focus on investment opportunities that satisfy these criteria. Last year, it completed the acquisition of London’s Winchester House in one of the city’s most significant deals since the pandemic.
The building is slated for a significant renovation, which will see it become of London’s most sustainable luxury office spaces, suitable for blue-chip occupiers.
Castleforge also continues to operate Clockwise, its flexible office operator, which offers high-quality amenities, strong hospitality, and flexible leasing arrangements.