The global spread of the coronavirus, coupled with social distancing measures, has forced many business and office employees to resort to working from home in order to keep operations going.
This trend is likely to continue well into the future even after the pandemic is erased, posing possible threats to the property industry as offices become accessible in one’s dining room or workstation at home.
According to venture capitalist and former FNB head, Michael Jordaan, operations are unlikely to be the same again after the lockdown and working from home will become the norm for many businesses.
"Managers have seen that they can actually manage the output of employees without monitoring office attendance. Employees have found ways to be even more productive at home than at work and do not waste time in traffic," he said.
This is not so promising for the property industry, as "businesses now see that they do not need all the expensive office space," Jordaan added.
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The same sentiment was echoed by Stanlib’s Head of Listed Property Funds Keillen Ndlovu.
"If working from home becomes a success (early signs are potentially indicating that), this may have a negative impact on the demand for office space in future.
"As leases expire, we are likely to see tenants require less office space due to office consolidation (recent examples include Discovery, Sasol, PWC, Deloitte) as well as hot-desking, and the ability to work from home," said Ndlovu. Hot-desking is a system that allocates desks to employees as required, or on a rotational basis.
But the horse may have bolted already. According to a Gartner Inc. - a global research body - a survey conducted with 317 CFO and Finance Leaders revealed that 74% of senior leaders intend to permanently move about 5% of their on-site staff to remote positions after the pandemic. This comes after the leaders identified opportunities in working from home structures, which include cost-cutting measures.
Although more South Africans are using the internet - Stats SA noted that 67.7% of South Africans used the internet in some form in 2019, up from up from 63.8% in 2018 - only a small number have reliable access to the internet from home.
Those with limited or no access to internet outside of the office are at risk of remaining behind.
"The reality is that access to the internet is crucial. Those individuals in the world that do not have internet access are at a distinct disadvantage. That’s why the much overdue spectrum release and auction is so crucial for South Africa," said Jordaan, who is also an investor in Rain, a national low-cost mobile data-only network.
Mobile operators have blamed the lack of spectrum for relatively high data prices in South Africa compared to other emerging markets. The last time government granted additional spectrum to Vodacom and MTN was in 2005 for the rollout of 3G.
While the government has promised to auction high demand spectrum by the end of 2020, the SA Chamber of Commerce and Industry has urged President Cyril Ramaphosa to bring the auction forward to no later than end June 2020.
Affordability of data by some mobile providers is likely to provide some light at the end of the tunnel for those who cannot afford expensive internet.
"Employers just need to enable their employees to prove that they can contribute without being at a specific location," said Jordaan.