The office: its meaning, history and future

“I haven’t been to my office now for several months.” “When I go to my office it’s only for a meeting.” “My office is my dining table.” Are the offices so many of us worked in for decades becoming an extinct space? Will we still need office buildings? What offices will be around after covid-19 has been conquered? The Economist recently said “many offices were being run as relics of the 20th century […] the covid calamity will prompt a long-overdue phase of technological and social experimentation, neither business as usual nor a fatal blow to the office.”

The word office comes to us from the Latin word officium which means ‘performance of a task’. Etymology says the Latin word was contracted from opificium, literally ‘work-doing’. A person holding on office, an officer, has a responsibility, a duty to perform. The Uffizi Gallery was initially built in 1560 for Cosimo I de’ Medici to house Florence’s administrative and legal offices (uffizi in old Italian). The tasks in the Uffizi involved intellectual labour, white-collar work.

Offices in both senses of this word are side effects of organisations. The spatial sense of office that eventually evolved to uffizi probably began with the invention of writing over 5,000 years ago as high priests of early empires organised and accounted for the production of wealth.

In Organizations, published in 1958, James March and Nobelist Herbert Simon say the set of rules for performing a task is a programme. Two conditions underly and are implicit in the idea of office: 1) how firmly or strongly tasks can be differentiated and classified; 2) how thoroughly a task can be programmed and communicated.

What will be gained are efficiency and effectiveness. Lost will be the social functions of the office

Two generations ago, it became apparent that the hierarchical integration of the previous generation’s organisation had to loosen up. And it did. Paul Lawrence and Jay Lorsch in their classic Organization and Environment five decades ago addressed the problem of differentiating and integrating an organisation’s elements to make it successful. They showed horizontal integration was as important as its vertical counterpart. It was about then that the open office plan (Burolandschaft, i.e. office landscape) came into being in Germany and the Herman Miller Company began creating furniture for the more flexibly arranged open office. It didn’t hurt that the cost of this movable furniture could be amortised faster than traditional fixed office walls and doors.

Programmes have long been and still are communicated face-to-face in real space. The great benefit of spatial offices is that it enables face-to-face communication and transactions when subjective intent must be verbally elaborated and made explicit. The Coase Theorem says that firms, work organisations, exist to reduce transaction costs which would be higher and require legal apparatus when outside an organisation’s boundaries. Spatial offices integrating an organisation’s parts reduce mutual uncertainties and the transaction costs of intellectual exchange. As writing shifted from cuneiform to sheepskin, papyrus, paper and eventually to digital electronic media, many programmes could become more accurate, elaborated, finely differentiated, explicit, efficiently coded and communicated.

It’s undeniable that the programming of tasks has improved geometrically over recent decades while at the same time task classifications have had to become much looser. Two reasons: one, a constantly shifting competitive environment; two, we individually have more say in where we fit in the division of labour. Almost every layer of a hierarchy can be deconstructed into parts located almost anywhere.

The quantitative contraction of traditional office space is long overdue, happening and will continue. What will be gained are efficiency and effectiveness. Lost will be the social functions of the office as many office workers, excepting those in high managerial positions of large organisations, start-ups and professional firms, will be spatially segregated from each other. Tall office buildings will likely be places reserved for those in high managerial positions. Others may be converted to residential use or places where interior spaces need interconnection, like museums.

The processes of spatial redistribution won’t take place overnight. The big unknown is how they will affect metropolitan life. It will be a mistake for developers and designers to act on and affect spatial patterns based only on anticipations of market behaviour. Technological and social experimentation using the vehicle of real estate could easily and misguidedly fix what’s not broke. A period of benign neglect is necessary.

source: Property Chronicle

Philippine property sector poised for recovery

The country’s real estate sector is poised for recovery this year on the back of a positive economic outlook with the easing of pandemic-induced restrictions, according to real estate services firm Santos Knight Frank (SKF).

Data centers, which are seen as the next growth segment for the real estate sector, are expected to double in terms of supply capacity in the medium term.

In a briefing yesterday, SKF chairman and CEO Rick Santos said the company has an optimistic outlook for the property sector this year with the reopening of the economy.

“We will see a much more robust level of activity in the real estate sector this year, especially in key sectors such as industrial and logistics, REITs (real estate investment trusts), residential and office. We are particularly excited about prospects for data centers and renewable energy, which we predict will see high levels of growth over the succeeding years,” he said.

In the industrial and logistics sector in particular, Kash Salvador, director and head of investment and capital markets at SKF, said it would continue to be driven by e-commerce demand.

“Long-term structural fundamentals have positioned the industrial and logistics sector as one of the better performing real estate asset classes during the pandemic. That will likely remain so as warehouses still see significant demand partly driven by e-commerce,” he said.

While repurposing real estate into storage spaces has been popular during the pandemic, he said supply of fully equipped storage facilities has become a challenge.

He said this provides opportunity for property players to develop and accommodate the demand by occupiers.

For the office sector, Morgan McGilvray, senior director of occupier solutions and services at SKF, said supply pipeline is quite strong with construction of buildings being delivered despite the pandemic.

“We are still expecting about three million square meters or so from now until 2025,” McGilvray said.

He also said the firm expects demand to be better this year than in the last two years, to be driven by the business process outsourcing sector.

“We expect usual locations around the world to be providing most of the demand. That’s going to be US and Canada out of North America, Australia, New Zealand and Europe,” he said.

Monica Gonzalez, manager for occupier solutions and services and data centers lead at SKF, said the country’s data center market is seen to double in the medium term with several data center operators looking to set up facilities in the country.

She said a combined 125 megawatt (MW) worth of potential capacity could be added to the total capacity at present based on data center operators that have expressed interest to expand in the country.

At present, she said SKF research shows the country’s total data center capacity is at 94 MW.

In terms of how much space would be taken up by data centers, she said a 10 MW data center capacity would need at least one to two hectares.

She said the Philippines is becoming an attractive location for data center operators to set up facilities given its investment-friendly climate; strong government support to make the country the next hyperscalers hub in Asia-Pacific; renewable energy push; available land; as well as large pool of information technology (IT) graduates that can fill required roles.

Data centers provide data storage and IT services to businesses.

Gonzalez said demand for data centers in the Philippines is being driven by rising digital consumption or use of e-commerce and cloud-based services; the ongoing moratorium on new data centers in Singapore; as well as the high number of social media users in the country.

While the data centers sector is seen to grow, she said there are still challenges.

“Data centers need space and power. Certainly, power supply would still be challenging. We have good network of power substations, and renewable energy supply but it still something that has to come up to speed to really accommodate the growing market,” she said.

Source: Philstar

Philippines office demand seen to pick up this year

Office demand in the Philippines is expected to pick up this year, with majority of the suspended deals over the last 12 to 18 months likely to be revived, a leading global real estate services firm said.

In a report, Cushman & Wakefield Philippines said despite massive exits from Philippine offshore gaming operators (POGO) throughout 2021 and pipeline supply approximating pre-COVID 19 levels in 2022 at 787,000 square meters, average prime and Grade A rents in key commercial business districts (CBDs) and urban centers are expected to reach trough in late 2021 through to early 2022, approximately 12 months earlier than envisaged at the start of 2021.

Claro Cordero Jr., director and head of research at Cushman & Wakefield Philippines, said corporate occupiers are also taking steps to rationalize their current real estate footprint and formulating future real estate strategies.

“In the Philippines, emerging asset classes such as data centers, horizontal residential developments and international grade logistics/warehousing facilities have also gained traction among investors seeking higher yields and/or lower volatility.

All these asset classes, as well as new real estate investment trust (REIT) offerings in 2022, have strong growth outlook prospects and offer good diversification benefits,” he said.

These asset classes are expected to be increasingly sought-after amid a fragile economic recovery by the local investor community, Cordero said.

Source: Philstar