According to a recent Roy Morgan poll, 32% of working Australians were working from home between April and May. This number was even higher in traditional ‘white-collar’ industries such as Finance and Insurance where almost 60% of the workforce was working from home.

Arguably, an unintended benefit of the pandemic has been that we have seen a large segment of the economy continue to operate business as usual, while working from home, and without any reduction in worker productivity.

The forced shift to working from home has led to many questioning the future of office buildings? Will a long-term outcome of  COVID-19 be that far more people continue working from home, and if so, will we see an overabundance of vacant office buildings and a crash in corresponding property values?

I am no futurist, but my belief is that CBDs around the country will not be turning into ghost towns any time soon.

Many businesses rely on collaboration and teamwork to drive innovation, and while applications like Zoom and Microsoft Teams are great, I do not believe video conferencing is a substitute for face-to-face human interaction.

Even the CEO of Microsoft, arguably a major benefactor of working from home with its Microsoft Teams platform, warned against permanent arrangements. In an interview with the New York Times, Satya Nadella warned that making remote work permanent could lead to negative consequences for social interaction and mental health.

Further, questions are starting to be asked as to whether “working from home fatigue” is starting to kick in. A recent survey in the US by architect and design firm Vocon found that companies have started to report a drop in productivity. Vocon surveyed the heads of nearly 50 businesses around the country and found that 40% of them have started to see decreases in productivity as staff work remotely. Many employees also missed being able to connect face to face with colleagues and had trouble setting boundaries for when work started or ended.

As for the long-term investment implications, I would caution investors against allowing short-term events to impact long-term investment decisions. When looking at property as an investment, it is not only important to consider its current use but also its potential future use. With a growing population, demand for land will likely continue to be strong in and around CBDs for many years to come. As Mark Twain said in his famous quote: “Buy land, they’re not making it anymore”.

Now I am not suggesting there will not be any short-term impact on commercial property values, but I am suggesting that you should look at the bigger picture. Sometimes the greatest opportunities arise when the masses are thinking the complete opposite. As per the old saying, there are three things to consider when investing in property: location, location, location. Who is to say that a vacant office building today cannot become a multi-use asset in the future comprising retail, logistics, residential, and office?

At Hewison Private Wealth we have been able to deliver great results to our clients by investing in high-quality commercial property. We build our client’s property exposure with an emphasis on diversification across different segments of the property market including, office, industrial, medical, hotels, service stations, etc. This approach minimises investment risk and ensures our clients can benefit from the features of different types of property.