Tech Giants Add More Office Space To Prepare For Great Return
GLOBAL – Firms, particularly tech titans, are acquiring and renting more office space in anticipation of employees returning to their workplaces at least on some days, according to a recent report from Computer World.
For example, Google’s parent company Alphabet has invested almost US$100 million on expanding its commercial real estate portfolio (CRE) in the United States since January 2020. These included a US$28.5 million office it purchased in Sunnyvale, California at the height of the virus outbreak.
Then in January 2022, Alphabet announced it plans to spend US$1 billion for an office campus in London.
“We’ll be introducing new types of collaboration spaces for in-person teamwork, as well as creating more overall space to improve wellbeing,” wrote Google UK’s Managing Director Ronan Harris in a blog post.
“We’ll introduce team pods, which are flexible new space types that can be reconfigured in multiple ways, supporting focused work, collaboration or both, based on team needs. The new refurbishment will also feature outdoor covered working spaces to enable work in the fresh air.”
Harris explained that the objective is to offer staff flexible office space with amenities to encourage them to work on-site, while acknowledging that many workers would still want to work from home (WFH) “a couple of days a week.”
Other tech giants as well as other companies in other sectors are following suit. “We’ve seen a lot of activity among tech firms taking on more office space, not just buying, but leasing it. Amazon and Facebook, they’re all adopting the expansion strategy,” said Ray Wong, Vice President of Data Operations at Altus Group.
“The numbers match Google’s increase in accruing office space, so it seems The Great Resignation is not taking a toll on companies valuing office space,” he noted.
Data from commercial property company Altus Group showed that US firms acquired 78,354 commercial properties for the whole of 2021, up from 57,174 in 2020. For the first quarter of 2022, they have already bought 22,423 commercial properties, and if the trend continues the overall tally for this year could exceed that of 2021.
Furthermore, the average occupancy level on Kastle System’s Back to Work Barometer increased to 40.5 percent in April from 39 percent in November 2021. That’s the highest figure since March 2020, and every US city registered growth in office occupancy.
