Returning to the office: how the pandemic changes the need for indoor air quality, healthy buildings, technology, and data in commercial real estate.
We interviewed 100+ people at TNW and PROVADA about smart & healthy offices
Questionnaires' results from PROVADA and TNW reveal that healthy buildings are a great strategy for attracting and maintain commercial tenants.
- PROVADA respondents reported a 9% decrease in day-to-day occupation of their offices.
- PROVADA respondents rate the importance of an interactive tenant experience with an 8.2.
- A staggering 82% of business decision makers at TNW would pay a premium for a healthy building.
Forceful factors: hybrid working & indoor air quality
According to our PROVODA respondents, the biggest post-covid impact on occupancy rate has been hybrid working. On average, they estimated a decline of 9% in occupancy rate. If only looking at indoor air quality and hybrid working, our correspondents think that on average of 29% occupancy change is explained by air quality, and 71% is explained by the ability to work hybrid.
What is interesting is that if we only look at property managers or ESG managers, the effect of indoor air quality increases from 29% to 45%. This means that property and ESG managers weigh air quality more important than others for occupancy. Whoever is right, the main line of thought is that between hybrid working and air quality, occupancy rate can be 29% to 45% related to air quality.
Smart building priorities
Various factors, such as NetZero, hybrid working, legislation, and digitalization cause the altering landscape in commercial real estate. Therefore, we asked attendants at Provada what their highest priority is. For most people, it was hard to rank them, because the goals are aligned. However, at Provada smart building priorities were ranked as follows:
When diving deeper, we see that property managers and investment managers think differently about this: property managers ranked energy twice as often as the highest priority compared to investment managers. On the contrary, investment managers were twice as often more interested in overall efficiency increases. To learn more about the financial benefit stats for both investment managers and property managers, check out this page.
Healthy building premiums
We also asked about how important it is to create an interactive tenant experience. If we look at the urgency of creating an interactive tenant experience, at Provada they rated this with an 8.2. This matches with the results from our questionnaire conducted at The Next Web (TNW). We found that people rated the added value of a smart office with an 8. What is more important is that the employer’s rated smart offices with a 9.2! These employers are the decision makers for the office location and thus the main customers for investment managers. So, with declining office occupation… what is the best strategy?
Retaining tenants should be the top priority given the uprise in hybrid working and its impact. Based on our research, we can see a healthy building is top priority for tenants. Health is something human centric and based on more parameters than just those needed to optimise for energy or efficiency. On average, our respondents expect to renovate 42% of their portfolio in the coming years. If you are amid of making plans for renovations, this is your opportunity to shift your efforts from a smart building that optimises energy to a smart building that includes optimising for health, as this is what tenants want.
Shift your efforts from a smart building that just optimises energy to a smart building that includes optimising for health, as this is what tenants want.
And people are even willing to pay a higher price for this as well. 69% of our respondents would pay a premium on a healthy building and for decision makers, this was even higher. A staggering 82% of decision makers would pay a premium for a healthy building. To learn more about the financial benefit statistics for both landlords, tenants and employees, check out this page. To summarise, smart healthy offices are an excellent strategy for attracting tenants and higher rental fees.
About this research
We have collected over a hundred respondents from the tech community and the real estate community during Provada, the annual real estate fair in the RAI Amsterdam, as well as one of the biggest tech community events in Europe: TheNextWeb (TNW). The responses are anonymously collected and share the broader view of larger and smaller organisations active in tech and real estate. The respondents at Provada work in the Dutch real estate sector, and the people at TNW come also from abroad. Visit Clairify for more information.