It is a certainty that office space over the last decade has been on its way to a substantial change. Covid-19, if anything, has certainly sped up this true fact and will most likely make major changes in office design or possibly make certain types of office space and services disappear.
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How will this affect the existing office and commercial space?
Will offices cease to exist as such and go totally digital?
And what about shops; will they all go digital and merely operate from a warehouse and traditional customers only buy online?
These are all complex questions which could lead to several different answers. Two extremely important factors to consider are good productivity and a happy workforce. This could be achieved by working from home, but not in all cases. Some companies have seen a benefit from running things online and switching from face-to-face meetings to arranging meetings in digital or video conferencing form or not seeing their customers except in essential cases like signing certain important documents.
Will they go out of business?
In a number of European jurisdictions including France, Italy, Germany, Spain and Portugal, certain commercial transactions must be executed before a Notary Public. But other than that, most commercial contracts are getting signed in digital form. So the next question is, what happens to all these buildings that have created some very modern office spaces? Will they go out of business? Certainly not if the development or management company knows how to reinvent things and move forward with times. It is not an easy affair but it is possible to adapt to the future trends.
One way forward is mixing office spaces with leisure amenities. Event areas, restaurants, spa facilities, beauty parlours, or gyms could very well mix with modern office space. A good layout could include restaurants located in the top floors to enjoy the best terrace and indoor views whilst health clubs or gyms could use mezzanine levels or lower levels and have more space perhaps. A clever architect with commercial sense could work wonders with distribution of leisure and office space together which would benefit all parties involved.
This is not new; the hospitality industry has been using this successful formula in the past decade and it looks like it really does attract customers who feel they can do a large number of things within the same shopping, office and leisure building without the need to drive to other places. This rule applies to all retail business as well. There are people who buy solely online and lots of others that do the opposite. Some people trust a photograph and just order without trying. This is perfectly feasible but there are people who do not entirely trust buying without seeing the final product unless they know it inside out. Let us take as an example clothing and garments. If a gentleman client wants a pair of well-known jeans like Levi Strauss model 501 in size 36, this does not need any checking and the purchase can be achieved online with a few clicks. But let us think of a top-of-the-range suit from Zegna or Cerruti. This requires a physical try and it is an entirely different ball game. Or an elegant dress for a lady that is available as part of a ready-to-wear collection that changes each year on each season at least twice. Can anybody tell me of a wise lady that would go ahead online? Without trying it on first? I have my doubts.
In addition to these small examples there are plenty of other similar cases. These are some of the reasons why traditional shops will not disappear. Some will, but not all. Buying online has, without a doubt, great advantages. But there are drawbacks as well. Issues with VAT, which in Gibraltar does not exist – it is hard for some countries abroad to understand this. If we get the wrong size or product the return is cumbersome and time consuming when if we buy at the local M&S for example, all we do is turn up and get a replacement or a refund there and then. And the list of things one can simply not buy online is endless. An important thing to know is that what we call online shopping is not really new. In the 80s we had catalogue retail or ‘mail order’. Almost as old as the sea. The difference is the speed at which we can get things ordered and the quality of photographs amongst other advantages. This is part of our progress in society. The two ways of shopping can surely, and will most likely, coexist.
Another good way forward with empty commercial and office space is to turn this stock of property into residential units. Again, this is not new and it could certainly work out possibly mixing with all the above-mentioned options. This could be the subject of a future article.