Permanent Home Office? 74 Percent of Brazilian Companies Answer Yes!

RIO DE JANEIRO, BRAZIL – After weeks of working at home, 73.8 percent of companies intend to establish the home office as a permanent post-pandemic practice in Brazil. Such is the finding of a study conducted by the consultancy Cushman & Wakefield, which surveyed 122 executives from multinationals operating in the country.

Curiously, before social isolation, 42.6 percent of companies had never embraced the concept, and in 23.8 percent of companies, the home office was nothing more than a prospect under consideration.

The purpose of authorizing home offices even after the pandemic is explained by the favorable assessment of the experience. For 25.4 percent of respondents, the experience of working remotely is entirely positive, while according to 59 percent there are more positive than negative points.

Only 2.5 percent of executives surveyed said the experience is entirely negative and another 13.1 percent said there are more negative than positive points.

This change in the labor market may have direct implications on the real estate market. According to 29.5 percent of executives, companies should reduce physical space in the future due to the success of the home office, while another 15.6 percent pointed out that the decrease should occur due to economic issues related to the pandemic.

In both cases, the reduction should range between 10 and 30 percent of the total square footage. In turn, 35.2 percent of respondents said it is not yet possible to determine whether anything will change in the offices, and only 19.7 percent said there will be no reduction in physical space in the future.

However, this new scenario should not impact rental prices, at least in the short term, as lease contracts have an average term of three years, and occasional pressure on prices does not usually lead to renegotiations.

“We are only now returning to the 2014 pre-crisis price level, and recent launches cost more per square meter in the more privileged areas,” says Jadson Andrade, market research manager at Cushman & Wakefield.

“But should the crisis deepen, we may see the return of spaces starting next year”. Today, the rate of high-end corporate floors available in the city of São Paulo stands at 16 percent, while in the city of Rio de Janeiro it is 33.9 percent.

The Cushman & Wakefield survey also wanted to know if the quarantine had an impact on rental or remodeling projects in new offices. According to 12.3 percent of respondents, there was an interruption in plans due to the adoption of the home office policy, while 17.2 percent said that the shutdown occurred for other reasons.

At the other end, 14.8 percent of decision-makers assured that there was no interruption and that the lease and/or work plan was maintained. However, the majority said there was no impact, as there was no plan in place.

Source: Exame