Pandemic affects office spaces

The pandemic has changed conditions in the office market, among other areas, as businesses try to adjust their space requirements to the demands generated by the coronavirus crisis.

The expansion of teleworking across a considerable share of companies and the need for social distancing – even if the practice is gradually being curbed, even by major multinationals in Greece – are shaping a completely different landscape than the one before the pandemic.

In a recent report on the property market, Delfi Partners said the impact of the pandemic on the office market, both in rental rates and on new space supply, is expected to be considerable, while the absorption of office space is likely to drop. Delfi is one of the most important partners for banks in their effort to sell off real estate assets in the context of clearing their nonperforming loan portfolios.

“We anticipate significant shifts in the office market due to the increase in remote working. We expect large enterprises to seek more flexible terms of leasing, regarding both office surface area and the length of the lease. In this context, companies will either seek to rent smaller offices, due to the increased number of employees working from home, or opt for short rental contracts because of the uncertainty the pandemic has created in the economy,” said Delfi in its report.

The big question is whether these shifts in companies’ priorities are of a temporary or permanent nature. October is seen as a decisive month, as it should become clearer by then if Greece will be hit by a second wave of coronavirus or the country will manage to overcome this period without a major outbreak. In any case, the continuing uncertainty is likely to persist until the end of the year at least, and possibly until a vaccination is available.

It is also possible that teleworking will become the norm for many enterprises. Already some large groups operating in Greece, both international and domestic, are implementing cost-benefit studies to determine whether the expansion of teleworking also reduces operating expenses. Meanwhile, many companies that were previously unprepared for teleworking are now rushing to get set up for distance working over the winter.