While the Omicron variant of Covid-19 has thrown us another curve ball and delayed the long-awaited back-to-office plans of many companies, this does not mean that office landlords will not find opportunities during this temporary downtime, said leading diversified professional services and investment management firm Colliers (NASDAQ and TSX: CIGI).
According to Maricris Sarino-Joson, Director of Office Services – Landlord Representation at Colliers: “We have seen disruption in the office leasing market due to the Omicron variant of Covid-19, but we believe that office landlords should always be on the lookout for opportunities now and beyond 2022.”
“The Omicron variant should not hinder the property market’s recovery and the much-anticipated rebound of the Philippines’ office market. While the country battles a Covid-19 surge and new restrictions are imposed, landlords must now take action to prepare their properties for the eventual and inevitable return to work.”
Most crucial among the recommendations that Colliers has put together is the introduction of technology to minimize the spread of viruses and other disease-causing microorganisms in the workplace.
“There are many ways office landlords can retrofit their properties to make them safer for users and occupants, one of which is introducing touchless access in ingress/egress points, restrooms, elevators, and common areas,” said Sarino-Joson. “This strategy, which include hands-free door unlock mechanisms, virtual guest passes, and automatic door openers, helps safeguard against the spread of Covid-19 and other viruses on surfaces.”
Other technological innovations that landlords can implement according to Colliers include disinfection and sanitation equipment at the entry to the property; improving air quality by upgrading air-conditioning systems and introducing filtered fresh air into the building; treating surfaces with antiviral coating to prevent transmission from high touch surfaces; and the use of negative air ionization systems to suppress airborne viruses and microbes.
Landlords should also consider assisting occupiers to implement adjustments on design and fit-outs to accommodate new social distancing norms and health features. “This may mean coming up with recommended designs which promote health and wellness of office workers and offering flexible fit-out periods for occupiers to implement these much-needed changes,” said Sarino-Joson.
Some landlords may also consider converting spaces within their buildings into fully fitted swing spaces (or temporary office spaces). “Existing tenants can use these spaces while they wait for their permanent office to be built or renovated.”
Another way for landlords to improve the marketability of their vacant spaces is to stage them properly, said Sarino-Joson. “Just as homebuyers will not be able to imagine themselves in an empty house, when you show an empty office, occupiers will not appreciate its best features. Providing them with a photo of a well-designed office will give them the chance to love the place and see their business set up in this nice working environment.”
Lastly, given the current market situation, landlords may consider short-term leases to at least cover the cost of running and maintaining the property. According to Sarino-Joson, accepting short-term leases may also open doors to new and previously untapped clients, such as start-ups. But should landlords be able to find occupiers willing to sign long-term leases, consider sweetening deals by providing better commercial terms and offering concessions, such as flexible lease terms, partial termination options, and delayed escalation, among others. “Show the prospective tenant that longer commitment in the property can mean bigger cost savings in the long term.”
Although the current situation we find ourselves in may not be the most ideal, there are still plenty of opportunities out there. Colliers encourages landlords to be proactive in offering add-ons to their commercial terms in order to make them more attractive to prospective tenants. We also urge them to work amicably with occupiers as we all survive and thrive during this pandemic.