Progressive versus traditional office space, which works best?

March 5, 2020 / By  

When it comes to office fit-out, organizations have the choice of selecting a traditional, progressive or moderate fit-out style. Many of us are familiar with the traditional fit-out style which comprises fixed offices, allocated workstations and minimal collaborative work zones. The traditional fit-out style has shaped how we worked for years. More recently, we saw the rise of the progressive fit-out style. It helps to redefine the changing workplace by incorporating more agile or collaborative work zones and possibly no fixed workstations. A moderate fit-out style is a balanced hybrid of both the traditional and progressive fit-out styles. Let us discuss how cost, the changing work environment and the macroeconomic conditions can influence office fit-out.

Flexibility, better experience have driven demand for progressive fit-out style in recent years. Organisations acknowledge that as work becomes more fluid and employees demand flexibility, their offices should provide a better experience for employees, helping them to attract and retain talent. In JLL’s 2018 Future of Work survey, for example, many corporate real estate leaders rank collaboration and flexibility as the two most desired outcomes in driving human experience in the workplace. According to the survey, corporate real estate leaders expect collaboration at the workplace to improve by at least 30%, and hence we see an impetus to increase collaborative work zones in offices.

According to JLL’s Asia Pacific Fit-Out Cost Guide 2019/2020, the average fit-out cost has risen by 4.2% year-on-year in the region, largely influenced by labour shortage, increased demand for construction and higher material cost. However, on average, a progressive fit-out office costs nearly 23% less than a traditional fit-out office across 29 cities in Asia Pacific. From a different perspective, the shorter time required to fit-out an office in progressive style also translates to further cost savings.

Furthermore, the ongoing US-China trade spat and the recent COVID-19 outbreak could further exacerbate the slowdown in global trade and in turn, impact office demand in 2020. One would argue that the weaker office demand could translate to slower demand for fit-out, thus driving fit-out cost lower. When this happens, opportunistic organisations may take advantage of the lower cost to refresh their office fit-out. Nonetheless, this climate of uncertainty in the region means that we can expect continued volatility in fit-out costs.

Even as we discussed the many benefits of a progressive fit-out style, it may not be entirely suitable for certain job functions. For that, such organisations can adopt a moderate fit-out style that accommodates to both traditional and collaborative ways of working. Regardless of the fit-out style they pick, organisations should allocate more collaborative work zones in office to facilitate collaboration and provide a better working environment for employees.

Table 1: Fit-out costs by style (USD per sqm)Source: JLL, 2019

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