From a supply standpoint, the already highly competitive market (for landlords) will further see more pressure this year and next with substantial supply projection. With rent tariff and occupancy anticipated to decline, tenants should benefit from it, but it is not always easy for them as well. Due to the pandemic, many companies will not entirely return to the previous business model. The new system, which combines office and remote work, will become more common. The current health crisis may also have implications on the operation and design of alternative working space arrangements.
As businesses move towards more flexible options that will reduce traditional office spaces at the time when they would renew the lease period, an agile office layout will be more highly preferred. We think landlords should be more accommodative of such changes and focus on achieving or maintaining break-even in occupancy level to cover maintenance costs.