Why Asia’s Office Market Is More Resilient Against The Delta Variant?
ASIA – The region’s office market has suffered a smaller impact from the Delta variant as compared to that of the West, according to a commentary by Nicholas Spiro that was published on the South China Morning Post (SCMP) on Tuesday morning (14 September, SGT).
Spiro, a Partner at Lauressa Advisory, said the deadlier and more contagious version of coronavirus have caused less disruption to workplace strategies in Asia.
In fact, he cited a report by Jones Lang LaSalle (JLL) earlier this month which showed that office re-entry levels in Hong Kong, Beijing, and Shanghai in July exceeded 70 percent, while Tokyo and Seoul saw rates of 30 to 70 percent. This is even though the Delta strain was rapidly spreading across the region during that month.
In comparison, the Delta variant derailed the return-to-office campaign in the US, where COVID-19 cases currently average 150,000 per day, which is similar to the rates seen midway through the 2nd coronavirus wave at the end of 2020.
Coupled with a significant drop in vaccination rates, the rapid spread of the highly infectious Delta strain has compelled many high-profile multinational firms to postpone plans to get their workers to return to the office.
Last Thursday, Microsoft announced that it’s indefinitely postponing the return of its staff to their US workplaces, while other major companies like Ford & Google have earlier announced that they have delayed their re-entry plans to 2022.
Consequently, only 23 percent of employees in New York have returned to their workplaces in early August, according to statistics from building security firm Kastle Systems.
In London, where many companies have implemented hybrid work arrangements, offices were only operating at 11.5 percent capacity on average in early August, based on data from Remit Consulting.
Spiro said this disparity between the office markets of Asia and the West is due to several factors. For instance, in many Asian countries especially Japan, there is a prevalent culture of presenteeism and local firms are quite traditional when it comes to work arrangements.
In addition, the average homes in the region are smaller and they tend to lack the privacy or level of connectivity needed for remote working. This makes telecommuting a tough sell for most Asian companies.
As a matter of fact, a research carried out by CBRE in May that was published in July showed that despite the broader adoption of hybrid work arrangements, most businesses in the region expect their employees to work remotely only 1 day per week.
“What is more, in a sign of the extent to which Asia-based companies’ workplace strategies differ from those of Western multinationals, Asian firms strongly favour fixed seating, as opposed to the flexible or unassigned seating encouraged by Western companies as part of the shift to hybrid working,” Spiro noted.
“Another key finding, and one that helps explain the resilience and appeal of Asia’s office sector, is the stronger appetite for expansion shown by Asian occupiers. Unlike multinationals, many of whom are reducing their office footprints, the majority of Asian companies surveyed – especially those in the technology sector – expect to grow their property portfolios in the next three years,” he added.