OFFICE MARKET REPORT | 2nd QUARTER 2021

Trends

The hybrid model of work

The last year and a half have been a global experiment on the reality of remote work. Now, with the whole of Québec transitioning to the green zone, the easing of health restrictions and the reopening of Canadian borders, it is a first signal that a certain return to normalcy is on the horizon. The provincial government recently announced a gradual return to the office for city workers as of September under a hybrid model which translates into two days in the office and three days from home.

According to surveys done by the Institut de développement urbain (IDU), remote work had declined in popularity at one point, but with the news of a possible return to the office, interest in remote work has rebounded with 76% of respondents saying they would prefer to work from home more than half of the week if they were to return to the office. This popularity is mainly due to the benefits associated with work-life balance and the time savings related to reduced commuting between home and the workplace.

The challenge now resides in finding the right balance for employees and employers. Effective communication between employers and workers needs to be established to find a consensus. Several considerations must be addressed to plan for a safe return to the post-pandemic office. The health and safety of workers remain the priority in the eventual reopening of activities. Managers will therefore have to ensure compliance with public health regulations and precautions will also have to be taken in the event of a fourth wave in the fall. Landlords, for their part, must review the quality of their HVAC systems to ensure proper air quality.

For companies that are looking to adopt the hybrid model of work, questions arise both on an operational as well as on a workplace level. According to a survey by the Ordre des conseillers en ressources humaines agréés, nearly 50% of organizations surveyed plan to make significant changes to their current office space in the next year or so. Most companies are conscious of the importance of creating work environments that will promote exchanges, meetings, collaboration, and the sharing of information. There is a sense that a workstation would no longer be assigned to a single employee, but that workstations would serve a variety of purposes for a variety of employees.

It is clear that the function of the office is set to evolve. With the generalized adoption of remote work, certain individual assignments can be easily performed from the comfort of your own home. Offices therefore take on an entirely different role which tends towards collaborative work, team building, innovation, corporate culture, collective productivity, and a sense of belonging. The considerations associated with the so-called hybrid working model is an opportunity for organizations to be bold and innovative in planning for the future. The labour shortage is currently a huge challenge faced by many businesses and the office has the potential to play a critical role in attracting talent in the months and years to come.

The challenge for managers will be to develop the future model of workplace and to establish new standards for offices. The “one seat per employee” model will undoubtedly be revisited; expect that 20% to 70% of the workspace will be made up of unassigned seats. Of course, this approach will evolve over time and will certainly depend on each and every company’s vision as well as the corporate understanding between employer and employee.

The return to a new normal

The second quarter was marked by a progressive return to normalcy which indicates that there is a light at the end of the tunnel. The acceleration of the vaccination rollout, the lifting of certain restrictions and the gradual reopening of social, cultural, and economic activities are all indicators that a return to normal is within reach.

A report by Montréal International published in July also offers a glimpse of positivity. Despite the impacts of the health crisis and border restrictions, foreign investment from January to June in Montréal broke records with a total of 40 projects worth $1.86 billion. These results show that Montréal is very well positioned at a global level to attract large-scale companies in sectors such as video games, cybersecurity and artificial intelligence. The organization has high hopes that this injection of foreign investment will contribute to the economic recovery of the downtown area, which suffered greatly during the pandemic.

Furthermore, in an effort to revitalize downtown, the Montréal Chamber of Commerce has put forth an initiative dubbed the "I love working downtown" project which will act as a catalyst to support the city’s economy and drive the relaunch. This initiative will act on four main components which involve the return to office towers, workspace solutions, creative projects to enhance downtown as a place to work and the strengthening of strategic business sectors.

The next few months will be crucial in establishing the first steps towards a return to a new normal. Over the past few months, public health authorities have done a remarkable job through the vaccination rollout to enable the business community to plan for a comeback. The situation is still fragile, especially with the risk of variants, but it seems that the city is now entering a new phase in this ongoing crisis which has lasted for more than a year. It is certain that there will be new challenges for businesses as we embark on this new reality, but if there is one thing the last year has taught us, it is that Montrealers are resilient in the face of adversity.

In an effort to revitalize downtown, the Montréal Chamber of Commerce has put forth an initiative dubbed the "I love working downtown" project which will act as a catalyst to support the city’s economy and drive the relaunch.