The best way to explain this is to give the example of a friend in Rome. Our kids go to school together and he works as a director at the energy company ENEL. He was informed, not long after the lockdown, that smart working arrangements would become permanent with immediate effect and that from January 2021 they will impose a global 3 day smart working, 2 days in the office, working week. This will apply to all global managerial staff.
What is interesting about this is that ENEL are not alone in this decision. There are numerous other large firms taking the same decision. Enel have understood during lockdown that as a company they can perform all their normal activites online: conference calls, video meetings etc. For the days in the office the work place will be arranged into a number of generic work stations with connection capabilities and which will have to be booked in advance to ensure a place on your work day.
As a result of this ENEL are not going to renew 1500 contracts (which was to be expected!) but more interestingly they are going to be closing a significant amout of office space which will go onto the property/rental market. With many other firms taking similar decisions, what is the impact going to be on the commercial and residential property market? Could this lead to a surplus of property and push prices in cities down? Equally, what about people working from home, is the space they have sufficient? These thought leads nicely onto Trend No 2
2. Nesting
I always thought that nesting was the time when a young couple met, starting dating seriously and before long started making plans to buy a house, settle down and maybe think about planning a family.
Nesting is now the termed also used for property owners who are looking to either sell up and move from a urban area to a rural one, or others who are looking to purchase a second home in a rural/countryside area.
Data is coming out at the moment to show that the professional classes (who are the main beneficiaries of smart working) are taking steps to rethink their lives in light of the lockdown crisis. In the USA and also the UK data is showing that there has been a surge in requests for information about countryside properties or periphery areas to live, equally homes in urban areas with a garden and/or near an outdoor space such woods or lakes. In London, searches for houses with gardens are up 42% on last year. Is this a long term trend or something that we will see more of? At the moment it is likely to be a knee jerk reaction to the lockdown and is predominantly something that the professional classes have the fortune of being able to take advantage of, but it is not beyond imagination that this is a trend that is here to stay because, like my friend who works for ENEL who is also considering his current living arrangements (he will need an office space at home) alot of people who will now have the option to work from home, will want to do so in a non-polluted, potentially more creative space with perhaps contact with nature or at a minimum another room in the house which they can turn into a work space.
And it’s not just the property market that this could affect because if the trend could affect the provision of public services and utilities. Things like health services, schools and also the distribution of retail outlets as a way of servicing more spread populations may need to be rethought. It would present some real challenges but create some great opportuntities as well. What will be interesting is to see how bailout money from the EU is allocated and what, if any, conditions are attached to it because the talk is that significant demands will be made for EU states to invest in green infrastructure, show significant contribution to climate change goals and the provision of health services to citizens everywhere, to be eligible for Covid 19 bailout money.
Interestingly, in Italy, I saw a news article a week or so ago with a Sindaco in Umbria who said that he was looking to get funding to get the medeival town connected up to high speed internet, with the idea to re-populate the area with younger professionals who want to work from more beautiful places and not be confined to cities. I have been saying the same things for years. Without high speed internet connection the most beautiful towns, cities and villages in Italy are going to be inhospitable to anyone, not just the younger generation. To reverse the brain drain first you need to provide high speed internet connection to your citizens. High speed internet has become a utility just like gas, water, and electricity. So, let’s hope they manage to do something about it and attract human capital away from the cities and back into more creative and beautiful parts of the country.
