The impact of work from home on real estate

While work from home has been partially encouraged by many corporates over the past few years, it was never seen as a full alternative to attending offices and daily meetings.
The past year of the global pandemic made work from home (WFH) not only a safe but also an equally popular option.
At the same time, WFH has cast doubts on the minds of real estate developers who invest millions of riyals on huge towers and dollars with glass windows that are a symbol of a smart and prosperous society.
Compare to residential properties, real estate is more profitable for developers with businesses are willing to take spend little extra to make their offices presentable, iconic and different from their competitors. “It also narrates the story of a long journey that a company has taken from its humble beginnings,” sources in the property consultant market told the Observer.

OFFICE SPACE
But the work-from-home culture can rewrite the nature of the real estate market as large companies do not need so much office space in the years to come.
“The nature of businesses in Oman are not suited to WFH like in other countries which are more of trading and contracting in nature. But still, real estate developers and planners will be forced to take such factors into account in the future,” said the executive of a leading real estate office.
WFH is also likely to affect banks as businesses are less likely to take financing or loans for buying or expanding workspaces. According to a report, some finance companies are getting rid of as much as 40 per cent of their office space to make savings.
The same report said that WFH is not beneficial to young and fresh employees who will miss the interaction and on-the-job learning with senior colleagues.
Here in Oman, a new type of businesses has developed over the past year and most of them do not need large investment in properties.
These are homemakers and small-time budding entrepreneurs who cannot afford to take risks with huge loans for office spaces. They can easily invest the same money in getting good manpower and raw materials to prepare a good product.
“I could easily start my investment in my sweets and cake-making business without having to open a fancy boutique or shop in a prime area. I agree to attain visibility is a challenge with so many competitors, but the stakes are less. We can easily diversify into a new business without getting into anyone’s notice,” said Zahara, whose business flourished in the past year.
The staff most likely to go back to the office are traders, bank executives, while back-office functions such as finance, risk management and IT will spend more time working remotely. “It is not all over for office spaces and remote working cannot be universally applicable. Sprawling office spaces will be gradually replaced by small cubes or facilities such as gyms and for recreation to attract people to offices,” said a senior executive associated with business complexes in the GCC, including Oman.