Let us start by looking at remote working. Regardless of your personal views on working from home, it seems fairly certain that a number of companies and organisations will be offering their employees greater autonomy. How that will work out in practice remains uncertain, and will probably vary between employers and roles. But a natural consequence in any event is that the office should be configured to ensure a functioning interaction between it and remote working. In practice, this involves two things.

First, it will be necessary to minimise friction when meetings are held with both physical and virtual participants present. This can be solved by outfitting rooms where audio and vision are seamlessly integrated. And by ensuring that there are enough of such spaces.

Second, a larger proportion of office time will be devoted to collaboration and socialisation because the jobs requiring concentration will be done to a greater extent elsewhere. To indulge in a little tabloidese, we can say that the office will shift from a workplace to a meetingplace, and space should be designed accordingly. That means more and better zones for collaborating and socialising.

The second big change, which began to become evident several years ago, is the growth of flexible offices (coworking). Although the pandemic and a high pace of establishing such spaces have contributed to many office operators struggling to become profitable, we believe such concepts have come to stay. They will also probably acquire a bigger place in the market once a new normal has bedded in.

More tenants will opt for flexible solutions, either entirely or as a supplement to traditional offices. We saw an example of the latter when it became clear that EY is moving into Stortorvet 7. At the same time as signing its lease there, the accountancy firm reached agreement on access to the Spaces facilities in the same building. EY employees will also have access to all Spaces locations in Oslo and globally. In practice, this means that one and the same employee can utilise many office locations during a month.

If flexible offices become an important part of the market, being in control of supply, demand and profitability at the operator stage will also become more important. In addition, it will be necessary to understand which concepts, buildings and locations have the best prospects of success.

The third major change affecting the office market is the ESG wave, where “environmental” is the component which will be important in this context. A number of tenants are fairly certain to become more concerned about their own carbon footprint, and the office footprint is one of the few things which makes a difference for many.

A number of observers have maintained with some justification that few or no companies are willing to pick up the tab for environmental investments in office buildings. We believe this will change, however, at least for big companies and public-sector tenants. The pressure to act is growing. And because office rent represents a small component in the cost base, and investment in energy-efficient solutions in turn forms a limited element of the rent, it will be rational to pay this price.

Although the willingness to pay is growing, it will be advantageous to own buildings which can be adapted in a cost-effective manner. You can then offer the same product at a lower investment outlay, and it is not certain that current yields fully reflect the differences in investment requirements for different buildings. If you are poorly placed, however, you can console yourself with the thought that many others are in the same boat. That is no small comfort. If “everyone” has to invest more, the level of rents ought to rise.

Taken together, all these changes mean that property owners must be prepared to offer their tenants more environment-friendly solutions, build in more technology and convert spaces. The interaction between technical management and marketing personnel will be crucial for achieving this in a good and cost-effective way. However, success will create space for significantly excess returns.