PETALING JAYA: As the world takes on the largest ever work-from-home experiment, the demise of the office may yet prove to be an unlikely outcome.

Office activity for April has dropped in Asia-Pacific with international commercial occupiers postponing leasing deals as the pandemic disrupt supply chain and corporate cashflow, said property consultancy Knight Frank.

The delays in decision-making underscore the global uncertainty unleashed by Covid-19 and the heavy toll on regional real estate, its Asia-Pacific April 2020 Market Bulletin: Covid-19 and its impact on real estate said.

The report said 11 of 15 office markets tracked registered a drop in leasing activity. Manila, Guangzhou, Shenzhen and Hong Kong were the only four markets that registered stable leasing activity.
 

In Malaysia, corporate services director Teh Young Khean said the Movement Control Order (MCO) has accelerated the use of technology.

“We expect companies to take this opportunity to assess and analyse which type of work or function can be done remotely, ” he said.

This also depends on business and corporate culture as certain functions require “highly secured environment” to be carried out.Other organisations offer flexible schedules as an incentive, but rarely adopt a 100% working-from-home arrangement, Teh said.

Head of Occupier Services and Commercial Agency for Asia-Pacific Tim Armstrong said: “The need to preserve cash and reduce capital expenditure is inevitably putting a hold on corporate real estate decisions such as strategic relocations or fit-out projects which require significant capital outlay.”

Armstrong expect occupiers to “pause rather than cancel” such activities.

We are witnessing “steady demand” from food retailing, telecommunications, online education, and some manufacturing firms in some markets.

He said South Korea and China are seeing an uptick in activity the last two weeks. E-commerce logistics sector continues to be active in southern China. Taiwan office demand continues to outstrip supply, and a flight to quality trend indicates rents can be expected to continue growing.

In certain markets, what the office workers will be returning to may not be the same as they left behind. Put it down to social distancing.Neil McLocklin, Head of Strategic Consultancy said employees would need assurance that it is “ a safe environment.”

“This will mean we come back to a very different office, with perhaps every other desk vacant to allow social distancing, and very different behaviours, ” he said.

https://www.thestar.com.my/business/business-news/2020/05/01/office-leasing-dips-as-pandemic-disrupts-supply-chain