The growing trend of work-from-home has caused many to question the future of office space, but Brookfield Asset Management Inc. thinks otherwise and is, in fact, optimistic that office spaces will see a rise in demand.
Brookfield Asset Management Inc., which has reopened almost all of its global office spaces, sees that demand for office space will rise as workers return under a new normal.
At the Bloomberg Invest Global virtual conference, Brookfield CEO Bruce Flatt said that companies aren't getting rid of office spaces after being under lockdown for three months but are rather eager to return to the workplace.
Social distancing measures, on the contrary, is beneficial to the office building landlords. Flatt said that companies are leasing spaces more than before to accommodate their workers--instead of getting less--and quickly get them back to the workplace.
And these companies that lease spaces from Brookfield are now bringing back their employees, except for firms that chose to put plans on hold due to lack of social distancing office space.
Brookfield said that about 70 percent of London employees are returning to work, and 30 percent of New York workers are also returning to their workplaces. Flatt said that to think that companies will not return to office is "ludicrous," because sharing a common space is part of company culture.
Flatt said that the pandemic will not end physical office space but would likely cause the demise of "hot desking"--an arrangement that lets workers take whatever available desk there is, instead of having an assigned desk for each employee. The short-term office leases may also be affected.
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In a report, four factors will shape the future of office space demand: remote working, office design, technology, and commuting patterns. The report noted - and seem to agree with Flatt - that over the longer term, the physical office will still be a fundamental part of the corporate culture. It will continue to play an essential role in employees' work and productivity.
Brookfield Asset Management, which was recently named the top largest global public real estate companies in 2020, is well-positioned to emerge from the coronavirus crisis unscathed, Bloomberg said. According to Forbes, Brookfield had the most assets with $324 billion for the past year, the highest revenue totaling $69 billion, and is also second in highest profits with $2.8 billion.
In May, Brookfield said that the firm's client commitment to new investments amounts to $46 million and $15 billion in cash, while their long-dated credit facilities and other financial assets remain untouched.
On June 23, Brookfield Asset Management Inc. joined a group of investors to acquire a 49 percent stake in an Abu Dhabi natural gas pipeline network worth US$10-billion. Moreover, Brookfield Asset Management Inc. also acquired over 7 percent of British Land Company, one of the UK's largest property development and investment firms.
According to Flatt, the trend that saw corporations and governments outsourcing large amounts of infrastructure spending worldwide, as with this recent natural gas pipeline transaction, has now started and will remain the next 25 years.
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