As we move forward through the impacts of the pandemic, we are faced with numerous challenges that we've not experienced previously. To help you move forward we've compiled a set of common questions we are being asked.

What immediate property costs can be adjusted to meet the reduced use requirement as a result of COVID?

  • Look at mothballing areas of the building based on anticipated occupation, offset non-essential maintenance and low-level compliance.
  • Review requirements to model COVID READY adaptations versus mothballing areas of the building - it may be more cost-effective to leave all areas of the building open.
  • There may need to be a change to normal working hours to facilitate required infection control measures; late opening/weekends etc. This may need to be factored into cost adjustments.
  • Look at what the contractual recourse in your building's maintenance contract for a pandemic. Are service credits applicable, enforceable for reduced requirements and reduced testing regimes?
  • There will be a requirement to implement an enhanced cleaning/infection control regime, which will lead to enhanced cleaning costs. However, this could be offset by mothballing areas of the building so they do not require cleaning.
  • Analyse what the security and insurance impact of mothballing areas of the building is. This might lead to increased security costs and enhanced premiums for non-use. If that's the case, look at what landlord's obligations are in this event.

What assumptions should we start to make on our property and space requirements considering our lease terms and expiries?

  • Consider what occupancy requirement do you anticipate. We supported our clients in modelling different occupancy rates to determine spatial requirements which informed the decision-making process on space procurement/retention.
  • The working assumption could be a minimum utilisation ratio of 70% i.e. 7 desks provided for every 10 people. This is a very conservative assumption and based on the impact of COVID and enhanced requirement to work from home could be much lower.
  • It is likely that based on occupancy predictions the business is contractually committed to more space than it requires. If so, look into what the applicable mitigation measures are, such as, subletting of space, early lease surrender (please note this option has a high-cost impact).

What investments should we be stopping and reviewing and where should we look to be investing, if at all?

  • The requirement for property owners and users to look afresh at spatial requirements. Changes accelerated by COVID in space requirements driven by end-user requirements will significantly affect how much space is needed and the quality and design of that space.
  • This will affect all sectors (office, retail, HE etc) where working practices and cultural drivers will reduce spatial requirements.

How much property/space should we have and how do we assess our requirements to ensure we acquire the right amount of space we need?

  • There is a requirement to undertake a modelling exercise looking at the whole portfolio, modelling;
    • Rental commitment (model potential fluctuations in the rental market/landlord negotiations based on reduced demand in the market)
    • Operational costs
    • Property costs
    • Break clauses and termination dates
    • The commercial impact of early release from lease
    • Staff utilisation requirements annually over the next 3-5 years
    • Subletting opportunities (both market-led and where contractual agreements allow).

How do we design our space to provide “COVID Secure” when required and any new ways of working?

  • It will be essential to define the new ways of working and importantly the standards to which your business will adhere. These are operational as well as physical, i.e. what the building will look and feel like.
  • It will be essential to understand what the long term impact of the pandemic will be on the design of offices. Will industry standards be changed in terms of occupancy of buildings, will building design change? How will the business ensure that they understand changing standards and design a ‘future proof’ workspace?
  • Consultation and change management must be at the heart of all workplace change, if staff are not consulted with or feel part of the change then the impact will be significantly reduced and may have a negative impact.
Ned Roberts

Ned Roberts
Facilities Management Director

It will be essential to define the new ways of working and importantly the standards to which your business will adhere.