COVID-19 outcomes: exploring the footprints of the pandemic on the office sector in Johannesburg, South Africa

Abstract

Purpose

This paper aims to explore the impact of COVID-19 on office space in Johannesburg. This study further explores the role of changing work practices in the office sector in South Africa because of the pandemic and its impact on future office space use planning and management.

Design/methodology/approach

To understand the footprints that the COVID-19 pandemic has left on the office space market in Johannesburg, this study uses semi-structured interviews, which were administered to corporate office users, and a thematic analysis was adopted to understand the views, perspectives and expectations of office users.

Findings

The study showed that space users perceive COVID-19-induced remote working as having benefits, opportunities and challenges. A notable shift in office space utilization has emerged, with employees increasingly opting for roles that permit remote work. This newfound flexibility, accommodating both on-site and remote work, often makes working from home more appealing than traditional office environments that may no longer align with users’ preferences for office spaces.

Research limitations/implications

The study is limited to Johannesburg, South Africa, and may not apply to other African markets. Ten in-depth interviews were conducted, and analysis and results were deduced; this may be considered a limitation of this study.

Practical implications

The pandemic’s impact has brought about irreversible changes, compelling policymakers and business leaders to strategize and prepare. This proactive stance aims to prevent avoidable challenges for employees and companies during future pandemics. A thoughtful approach to the post-pandemic world can usher positive changes in the office and property sector. This includes the coexistence of both remote work and on-site working models.

Originality/value

This paper provides valuable insight into some of the outcomes of the COVID-19 pandemic in South Africa that are essential for future office space use planning and management. The insights from this study extend the literature and provide novel knowledge based on an office sector in the “global south.”

Citation

Akinsomi, O., Oladiran, O. and Kaseka, Z. (2024), "COVID-19 outcomes: exploring the footprints of the pandemic on the office sector in Johannesburg, South Africa", Journal of Corporate Real Estate, Vol. 26 No. 3, pp. 219-236. https://doi.org/10.1108/JCRE-08-2023-0035

1. Introduction

Office space use has changed significantly over the last two decades following changes to work culture. These changes have been driven by economic, socio-cultural and technological forces, leading to the emergence of innovative office space use models such as hybrid working and shared spaces (Miller, 2013; Sullivan, 2003; Harris, 2015). These innovative office space use models have become more prominent, particularly in service occupations such as IT and marketing (Saiz, 2020). Remote working has mainly gained prominence in the last decade. As of 2019, 5% of the UK workforce worked from home (Office for National Statistics, 2020), and 5.2% of the US workforce ultimately worked from home, while 43% worked from home occasionally (Hess, 2019).

Although working from home (WFH) was already well entrenched in many countries’ work cultures by the past decade’s end, the COVID-19 pandemic significantly altered working patterns and, by extension, the office real estate sub-sector globally. The pandemic created a global health emergency, which led to a shutdown of national economies and severe restrictions on the movement of people. In response, firms and organizations allowed their workforce to work from home. In the UK, 46% of the workforce worked from home within the first month of the official pandemic declaration of 11 March 2020, and 86% of those who worked from home attributed it to the COVID-19 pandemic. Evidence further suggests that approximately 60% of the workforce in Finland and 50% in Luxembourg, The Netherlands, Belgium and Denmark worked from home by April 2020 (Eurobond, 2020; Reuschke and Felstead, 2020).

In South Africa, there has been a heightened interest in and adoption of remote working following the pandemic because of the benefits recorded during the pandemic. Data from World Wide Worx (2020) reveals that companies, mainly those that had already rolled out digital transformation strategies before the COVID-19 outbreak, saw a 70% increase in productivity. Furthermore, 73% of South Africans in a survey carried out in 2020 expressed willingness to work remotely for an employer with no physical presence in the country (Statista, 2023). Although these positive sentiments appeared widespread during the pandemic, more recent signals appear to be mixed. Some scholars (such as Green Journal, 2022; Sigahi et al., 2021) have argued that recent working patterns attract benefits such as improved personnel planning, reduced commute-related carbon emissions and flexible leases, while others (such as Clark, 2021; Szumilo and Wiegelmann, 2021) argue that these practices have adversely affected employees’ well-being and productivity. A similar divergence in the sentiments associated with remote working (relative to office-based working) is observed in South Africa (Daniel, 2022). These mixed signals and complexities significantly affect the office real estate market.

This study explores the role of changing working practices in the office sector in South Africa. More specifically, it investigates the role of COVID-19 in shaping the expectations and sentiments in the user segment of Johannesburg's real estate office sector. To gain an in-depth understanding of the views, perspectives, sentiments and expectations in the user segment of the market, a qualitative research method was used using a grounded theory research strategy. Semi-structured interviews were administered to corporate office space users, and thematic analysis was adopted. The study showed that space users perceive COVID-19-induced remote working as having benefits, opportunities and challenges. Furthermore, companies in Johannesburg aim to reduce their office occupancy levels by negotiating more flexible leases. This suggests that the office sector in South Africa may be on a similar pedestal to other developed economies' markets, although some variations were observed.

Johannesburg is the provincial capital and largest city of Gauteng, South Africa, and an internationally renowned and vibrant metropolis. It is the most populous city in South Africa and is recognized as the financial capital of South Africa. According to Joburg (2018), the city generates 16% of South Africa’s GDP, employs 12% of the national workforce and is home to 74% of corporate headquarters. The city also features the largest and most established office market in South Africa and is considered Africa’s economic gateway (JLL, 2023). The city is, therefore, best suited for the contextualization of this study, as it will provide sufficient insight that can be used to understand the South African office market and, more specifically, the footprint of the pandemic on the office market in South Africa.

The changes to work practices, particularly after the pandemic outbreak, have left several footprints in the office market. These changes include reduced space requirements, shorter leases and increasing demand for higher space quality (Oladiran et al., 2023). In Johannesburg, office space demand decreased, and vacancy rates increased with oversupply in the market (JLL, 2020). Similar trends can be observed in other economies (Fiorentino et al., 2022). Thus, corporate organizations and businesses are increasingly engaging in conversations regarding their operational and adaptation strategies to match the current pace of the office market evolution (Kalyan et al., 2020). Data from Knight Frank’s (Y)OUR SPACE survey (Knight Frank, 2021) shows that 75% of corporate real estate space use managers are planning strategic changes to their office space uses. However, developing these strategies is complicated because of the insufficient insight into the current changes taking place and, perhaps, more importantly, the lack of clarity on what the immediate future holds for the office market. This can exacerbate the risk associated with real estate investment and provide insights into the potential changes that can mitigate some risks.

Although there are several scholarly contributions to the conversation on the COVID-19 imprint, the contribution to the office real estate market is relatively thin, and a significant number of these contributions provide descriptive analysis with limited empirical analysis. Although some scholarly contributions have been made more recently based on empirical evidence, there are still limitations. For instance, the paper by Oladiran et al. (2023) uses empirical analysis to explain the fundamental changes in the office market following the pandemic outbreak. However, this paper does not provide continental or country-level insight. Furthermore, their adoption of quantitative techniques using secondary data limits the depth of insight that qualitative methods, such as interviews, could offer. There is also a minimal scholarly contribution from an African perspective. Although studies (Ayodele et al., 2022) provide some insight into an African context (Ibadan, Nigeria), the paper focuses on co-working spaces. Similarly, Mayerhoffer's (2021) and Yang et al.’s (2023) studies are limited to co-working. This leaves a knowledge gap regarding the broad-ranging impact of the COVID-19 pandemic on the office market in Africa and, more specifically, South Africa.

This paper provides valuable insight into some of the outcomes of the COVID-19 pandemic in South Africa that are essential for future office space use planning and management. It also provides novel contributions to the conversations around the COVID-19 aftermath. The insights from this study extend the literature and provide novel knowledge beyond an office market in the “global south.” Previous studies that examined some of these effects using empirical evidence have not provided sufficient insights into the user segments of the African markets, making it challenging to identify the major trends and trajectories. The findings also indicate that regardless of the pandemic, economic factors remained core considerations in firms’ space use adaptation strategies during the pandemic, and lease structural changes, though noticeable, may be less prominent in the South African context; these contrast to the dynamics observed in Oladiran et al. (2023). Additionally, the findings indicate that remote working in the South African context primarily relates to working from home; third spaces (Saiz, 2020) are therefore less prominent in the South African context.

The paper continues with a review of relevant literature, and Section 3 provides an overview of the data and methodology. Section 4 presents the findings and discussion, and Section 5 provides the conclusion.

2. Literature review

The demand for office space is theoretically determined by a range of factors, which are macro-level, such as population growth, employment rates and economic composition, and micro-level, such as technological advancements, globalization and the evolving landscape of businesses (Rabianski and Gibler, 2007; Harris, 2015). Businesses’ diverse requirements and evolving operational practices have led to dynamic shifts in workspace needs. Occupiers’ activities, such as tenants’ expansion, relocation and spatial upgrading, have also influenced the demand for office spaces. These factors are now changing and transforming office space configurations and leading to the development of novel office space use models such as hotdesking, flexible working and shared spaces (Haynes, 2009; Miller, 2014; Rabianski and Gibler, 2007), and these are changing the conceptual approach to office market research.

The theory that underpins office space demand is premised on the assumption that demand evolves over a long period. While this is the case, there are often exceptional circumstances when demand fails to align with this theoretical construct as they fail to account for institutional, economic and political shocks that can cause sudden changes. The black swan theory suggests that, sometimes, rare, unpredictable events may occur, which can leave footprints and significantly change sectoral systems and traditions (Runde, 2009). This was the case with the outbreak of the COVID-19 pandemic in the first few months of 2020.

On 30 January 2020, the WHO [1] Emergency Committee declared a global health emergency following the outbreak of the COVID-19 pandemic across the globe. This was followed by the declaration of a global pandemic on 11 March 2020, and this led to the shutdown of several businesses, organizations and companies that asked their staff to work from home. The COVID-19 pandemic has been classified as a black swan event (see Antipova, 2021), disrupting economies, industries and societal norms globally, including the office market. The mandated shutdowns, physical distancing measures and surge in remote work have led to rapid unemployment, fiscal deficits and a contraction in national GDP (Chen et al., 2020). The unprecedented nature of the pandemic and its sustained economic repercussions underscore the concept of a Black Swan event.

Although work culture and workspace use were already in transition before the outbreak of the pandemic, particularly in service occupations such as design, marketing and customer service (Saiz, 2020), the black swan nature of the pandemic led to significant disruption of the office market. The “lockdown,” social distancing and remote working culminated in the underutilization of office spaces and other dynamics, reducing demand for traditional office environments (Nicola et al., 2020; JLL, 2020). Remote working has gained more traction, transcending occupational barriers and resonating with employers and employees as a viable working model (Bartik et al., 2020). However, this rapid shift to remote work has brought advantages and challenges to light, including altered perspectives on productivity assessment, well-being and work–life equilibrium (Bloom et al., 2015; Felstead and Henseke, 2017).

Miller (2014) argues that the overall density of space that a firm requires will decrease (or increase) as the number of employees in the firm decreases (or increases). This assumes that firms typically aim to maximize their available office spaces before they demand more. With digital technology advancements and increased shared spaces, hot desking and remote working (Miller, 2013), these new models should lead to decreased space demand as an adaptation strategy when economic and business shocks occur. Co-working has increased significantly and become more prominent after the pandemic (Mayerhoffer, 2021; Yang et al., 2023). The increased adoption of remote work has implications for the traditional notion of office space, compelling organizations to revisit their spatial requirements. This study, therefore, makes an essential contribution to the overall office space use demand in the context of black swan events.

It should be noted that the pandemic attracted benefits, challenges and opportunities. Ipsen et al. (2021) and Tagliaro and Migliore (2022) note employees’ perceptions of the pandemic-induced WFH [2] experience were more positive than negative. According to CBI (2020), employees now benefit from increased flexibility in their work patterns, time-saving from commutes, improved productivity and a more structured approach to communication. Some associated challenges include mental health, isolation and difficulty building relations, particularly for less experienced staff members. Some of these points have been supported by other scholars (such as Bloom et al., 2015; Felstead and Henseke, 2017). A firm’s perception of the benefits, challenges and opportunities offered by remote working plays an essential role in its strategy for how space is used. Oladiran et al. (2023) find that firms that have a positive sentiment toward working from home are likely to downgrade their office spaces, and the same applies to firms that share negative sentiments, i.e. they are likely to demand more space or keep their current office spaces the same. This suggests that examining the sentiments of an organization or space user(s) toward the pandemic is vital for establishing how the pandemic has affected their office space demand. The current study takes this essential factor into account.

Businesses revealed that they experienced productivity reduction, erosion of work culture and a heightened workplace health and safety concern (Marzban et al., 2021). Maillot et al. (2022) further note that changes to working times led to feelings of intensification and/or increase in working hours, and the lack of face-to-face social relations deprived employees of both their usual ways of working and the value they drew therefrom. Pataki-Bittó and Kapusy (2021) specifically highlight that Gen Z demographics have high expectations of the workplace with a preference for flexible work arrangements; they therefore suggest that for organizations to survive post-pandemic, they would need to adopt hybrid working models.

Although the body of knowledge around the COVID-19 pandemic and its footprint in the office sector is increasing, there is a limited contribution from an African context. Scholarly contribution, particularly in the African context, is still relatively sparse, with the vast majority being descriptive with limited empirical analysis. More importantly, though essential to the African context, contributions from Ayodele et al. (2022) have a limited scope of application, i.e. co-working. This leaves a knowledge gap concerning the broader implications of the COVID-19 pandemic for African office markets. The office markets in Africa are highly heterogenous and are at various stages of development and transparency; this study, therefore, is not an attempt to explore the footprints of the pandemic on African markets in general; instead, it aims to provide valuable insights that can enrich the quality of the debates on this subject from an African context and minimize existing ambiguity and generalizations that currently exist.

Therefore, the empirical analysis in this study is designed to provide insight into the outcomes of the pandemic in Johannesburg, particularly in the office market. These insights capture space users’ perceptions and sentiments about the Johannesburg office market, and they can indicate the trajectory of office space demand and the future of the office market in South Africa. These insights would be valuable to office market investors and portfolio managers, and they will also be helpful for office space use planning and management.

3. Data and methods

To explore and unravel a broad range of the footprints left by the COVID-19 pandemic on the office sector in Johannesburg, the empirical work in this study was carried out using qualitative techniques. As Thanh and Thanh (2015) suggest, this approach is appropriate for determining participants’ perceptions, understanding and experiences, and this can provide more in-depth insight beyond the scope of statistical analysis. This underpinned the approach to the study by Adisa et al. (2023). Moreover, the study's exploratory nature and the grounded theory research strategy required an inductive method. This approach relies on inferences from previously unknown relationships (Glaser and Strauss, 1967), enabling the researchers and respondents to co-construct knowledge rather than objectivity, proving a pre-set hypothesis (Charmaz, 2006). It also depends on participants' insightful and in-depth comments about their knowledge and experiences (Jackson et al., 2007). Additionally, the relatively recent COVID-19 pandemic and the high uncertainty associated with the remote working model support the qualitative methodology. By discovering how participants make meaning of their experiences, past, perspectives and situations, qualitative research strives to give an in-depth insight into their social reality (Ormston et al., 2014).

To gain an in-depth understanding of the views, perspectives, sentiments and expectations in the user segment of the market, semi-structured interviews were administered to corporate office space users, and thematic analysis was adopted. Gaining insights from stakeholders when an event or the phenomenon being investigated occurs is essential for comprehending the event's root cause and potential trajectory (Myers, 2019). Purposive sample techniques were adopted. This sampling approach seeks to guarantee that participants are chosen deliberately, allowing the researcher to obtain a sample of individuals who can provide pertinent information (Bryman and Bell, 2011). Furthermore, it enables the researcher to choose people who can contribute to the study (Quinlan et al., 2011; Creswell, 2013). Saunders et al. (2016) advise that a sample size of 5–30 is suitable for research for a semi-structured or in-depth interview. Additionally, Saunders et al. (2016) also suggest that a sample size of 4–12 is suitable for research on a homogeneous population. Kuzel (1992) further argues that a sample size of six to eight people can produce sufficient data for qualitative research. These perspectives framed the data collection approach and design used in this study.

According to Mays and Pope (1995), rich qualitative data can be obtained through a purposive sampling approach. This technique enables the researchers to identify individuals who can provide the appropriate level of information required for the study. Purposive sampling techniques were therefore adopted in the data collection. The interview subjects were ten corporate portfolio executives and property managers from firms based in Johannesburg who were knowledgeable about the impact of the pandemic on the office sector. They included four corporate portfolio executives, four asset managers and two property managers with more than ten years of work experience in the property sector at the respective selected companies in South Africa.

The property specialists were selected because of their extensive expertise in the property sector, and they were responsible for the use, management and allocation of the organization’s real estate assets. The respondents’ ages displayed variation, with the youngest falling between 25 and 40 years old and the oldest surpassing 55. Most respondents were within the age bracket of 41–54 years. Regarding company sizes, the respondents represented entities with over 100 employees, and their operational history spanned from 0 to 25 years within South Africa. These respondents were entrusted with real estate decisions from middle- to upper-tier management levels.

The questions were set up to be semi-structured to ensure uniformity of questioning was maintained while also ensuring that the respondents could provide further insights beyond the pre-determined direction set by the interviewer. Furthermore, it also gave the interviewer leeway to explore some areas of the conversation deeper based on the nature of the response or other non-verbal cues. For health and safety reasons, the interviews were conducted virtually. Moreover, remote interviews are increasingly becoming normalized and are generally perceived as more or less effective than face-to-face interviews.

All the interviews were held in English and recorded using online virtual platforms such as Microsoft Teams, for which consent was given. All respondents provided consent for the interviews to be conducted at the outset of each session. The interview had three sections. The first section aimed to capture the demographic and social characteristics of the respondents. The interviewer then asked in the second section about the benefits, opportunities and challenges associated with COVID-19-induced remote working, organizations’ perceptions about the WFH practice and organizations’ adaptation strategies. The questions in Section C aimed to examine the impact of the pandemic on the demand for office spaces and explore prospects.

This study adopted thematic analysis with the aid of MAXQDA software. A similar technique was adopted by Eriksson and Santesson (2021) in their study on organizational culture and the effects of remote work. Thematic analysis involves the researcher coding data to find themes for intensive analysis (Saunders et al., 2016). Large volumes of qualitative data can be analyzed using thematic analysis, but it can also be applied to lesser volumes of data to produce detailed explanations or interpretations (Saunders et al., 2016). Thematic analysis can interpret vast amounts of qualitative data, merge data from comparable notes and transcripts and extract crucial patterns and themes from the information for future research (Saunders et al., 2016). This analytical technique is agile because it is not constrained by a particular research viewpoint (Saunders et al., 2016). In qualitative research, the process of selecting, coding and categorizing data is known as data reduction. Data display is then followed by data analysis, which aids the researcher in reaching a study conclusion (Sekaran and Bougie, 2013). With this approach, data analysis is a repetitive process rather than a linear one.

Although the techniques adopted in this study suit the subject matter, there are a few limitations and challenges worth highlighting. One of these is transferability, which is the degree to which the findings from the study can be applied to various contexts or circumstances (Yilmaz, 2013). One of the ways this has been mitigated is the explanation of the research design, sampling and data analysis provided in the early parts of this sub-section. Furthermore, clearly defining the research questions, findings, interpretation and context throughout the paper allows the reader to understand the scope of the study and judge its transferability. It should, however, be noted that although the respondents were primarily based on their firms’ positions, the interview questions contained some general questions that transcended individual or company-based methods to general market sentiments. Another potential challenge relates to the use of virtual interviews. Lack of face-to-face interviews may sometimes lead to a loss of some non-verbal cues, although this study is not considered too sensitive, and as such, an interview such as this is unlikely to miss out on non-verbal cues. Irvine (2011), however, argues that virtual interviews are more effective at gathering sufficient data than face-to-face interviews. These limitations notwithstanding, this study is exploratory and aims to provide insight into a context that has received minimal scholarly attention. Generally, it contributes to the discourse on the role of the pandemic in redefining several economic and social realms, specifically the office real estate sector in the global south and South Africa.

4. Findings and discussions

The research findings of the conducted interviews provide better answers to the research questions:

RQ1.

What are the opportunities posed by people working remotely?

RQ2.

What is the impact of the COVID-19 pandemic on the demand for office space?

RQ3.

What is management’s perception of people working remotely?

RQ4.

Considering the COVID-19 pandemic, what are recommended strategies to maximize staff productivity?

The data collected has been divided into three main sections. To interpret the data, the researchers used the well-established pattern-matching methodology (Crang, 1997) to cluster and analyze the data. The initial step involved selecting the most informative sections of the interview transcriptions that addressed our research questions or their components. The subsequent step entailed creating a structural description of each interview’s content and incorporating insights into management perceptions. In the third step, we identified text passages sharing common arguments through thematic coding (e.g. theme: “increase in action controls”). This process allowed us to compare interviewees' responses, revealing similarities and differences. Arguments were then organized around similar themes. Drawing from our identification of common patterns, we focused on constructing a theorized narrative based on the research questions. The most significant findings are presented within these categories, providing a comprehensive overview of the interview results.

4.1 Analysis of categories and themes

In line with the research questions, the thematic analysis addressed four core factors that defined the COVID-19 footprints in the South African office sector. Within these categories, eight themes emerged, as shown in Figure 1. The core factors are remote working (benefits, opportunities and challenges), corporate management (companies’ adaptation and internal corporate strategies), the real estate market (changes to space demand and lease structures) and employee productivity (strategies involved and supporting infrastructure). These factors and themes capture core issues and provide a conceptual framing for insight into the COVID-19 pandemic footprint in the South African context.

Category 1: remote working.

The study by Bloom et al. (2015) detailed the benefits of remote working policies. As reflected in the literature review, South Africa was not spared from experiencing the benefits, opportunities and challenges initiated by all property sectors to set up home offices and increase the demand for hybrid and remote working. The respondents were unanimous in highlighting that remote working was the direct result of the COVID-19 pandemic. One of the respondents stated, “[…] we generally didn't apply remote working before COVID-19; actually COVID-19 is the brainchild of remote working.”

All the respondents alluded to the fact that remote working offered benefits/opportunities and challenges:

• Benefits and opportunities presented by remote working

The respondents admitted that before the COVID-19 pandemic, few companies practiced remote working policies in South Africa. The pandemic allowed most employees to work remotely. This was noted to have been attributed to the impact of the COVID-19 pandemic in South Africa. As a result of the COVID-19 pandemic, the idea of working from home gained additional attention and meaning because the proportion of people who work from home increased to unprecedented levels. Carroll and Conboy (2020) highlighted how COVID-19 pushed companies to adopt online working-from-home practices in a “big bang” manner. To recognize the dynamics of implementing, embedding and integrating new technologies and practices into businesses, they examine the normalization process theory (NPT) and its underlying components.

WFH provided a better work–life balance for most respondents, increasing their productivity as they had fewer distractions. One of the respondents stated that “you could just spend time with family and things like that, and you do have to sit in traffic for three hours a day.” The firms detailed reduced staff welfare costs, resulting in operational effectiveness and efficiency, increased staff engagement and a significant decline in absenteeism. The opportunity for work–life balance was acknowledged by the participants for WFH employees. The respondents alluded to how most tenants leasing the office building adopted a remote working policy, which increased reduction in the office space occupied because of staff not being in the office daily, which created opportunities for better used spaces to accommodate all employees. Many corporates across the globe have quickly welcomed the ubiquitous part of working from home by adapting to the pressing demands (JLL, 2020):

• Remote working challenges

The challenge expressed by most participants during the interview was the resistance of staff getting back to the office and how companies overcame the challenge as an opportunity to create spaces that would make staff more effective by creating flexibility for the staff and changes to the working hours (meaning less hours spent in traffic), as contributed to the research by Oladiran et al. (2023). However, employers also noted that some deadlines were unmet because of delayed feedback, technological challenges (internet service issues), miscommunication and power outages (load shedding). The quality of output from employees is also reduced because of reduced supervision. One of the core challenges of remote working is team cohesion and poor collaboration. One respondent stated, “As a team leader, sometimes just sitting around in the same space, this information sharing this collaboration, they’re just happen naturally without even thinking.” This sentiment was shared by several other respondents. Another respondent pointed out the health and well-being challenges posed by remote working. The respondent stated, “COVID was obviously detrimental to most, but that, that work life balance or that working from home situation and especially if things aren't going as well as they should be at home as it’s quite challenging.” Indeed, physical and mental health challenges can be exacerbated by prolonged remote working, particularly when some of the factors driving these challenges are driven by experiences at home.

It is also important to note that all the respondents defined remote working as WFH. Valuable can be drawn from this pattern, specifically that remote working in the South African context may in a way be limited to working from home. This contrasts with other remote working options, such as third spaces, for instance, which were highlighted in Saiz (2020). Third spaces refer to spaces that are not within conventional office spaces and are not in residential spaces. This includes working from restaurants, parks, pubs, etc. This study did not probe further into the prospects of third spaces, although it can be assumed that this transformation took place during the pandemic when social distancing was in force, and this would have made the exploration of third spaces difficult. Further research into this will be valuable.

Category 2: corporate management.

There was a concise effort to probe the corporate positions, perceptions and approaches to the adaptation of companies to remote working:

• Adaptation

The participants discussed how organizations had seen mixed perceptions and no changes in the practices of working from home before the COVID-19 crisis. They acknowledge how achieving collaboration had its challenges because of difficulties in sharing information, reaching out to people, making decisions and obtaining feedback, as observed by the participants. Hafermalz (2021) mentioned how remote working is not new; however, many companies were pressured to permit their employees to work from home, as in 2020, while the COVID-19 crisis surfaced globally. This had extensive implications for organizations, including how they might exercise management control, i.e. “have an impact on employees’ behaviours in appropriate ways” to obtain their goals (Merchant and van der Stede, 2007).

Furthermore, the respondents suggested that the adaptation to remote working was more “forceful” than voluntary. This indicates that corporate organizations supported remote working because they had no option; thus, the adaptation strategy lacked adequate planning and execution. Additionally, the tone in the responses differs from those in other economies where employers seemed to drive and support working from home because of the perceived “greater good.” One of the factors that may be responsible for this deviance is that the South African government had a less robust adaptation strategy to support companies and employers, such as the furlough in the UK; thus, employers would have been forced to think about the viability of their businesses if they remained shut for too long:

• Internal corporate strategy

The perception of management with employees working from home was mixed pre-COVID-19 pandemic, as the perceptions and practices were poor and with no change. During the pandemic in South Africa, only essential staff worked from the office, including security, cleaning and gardening staff. Most of the office building had to be closed, giving access to only essential staff. The respondents adopted rotations of remote working for the employees, scheduled office working days for employees and anticipated how many employees would be in the office at any given moment. In an entirely voluntary system, all employees can work at the office simultaneously, which can result in an office space shortage. There may be a conflict between employer and employee because of this situation. Ancillo et al. (2021) stated that companies must reconsider their values and corporate culture to align with emerging work theories. It is generally easier to achieve effective collaboration when everyone is physically present in the same space or location (Franken et al., 2021). Creating healthy work relationships between co-workers and interacting with colleagues is integral to an organization’s culture and social existence (Markland, 1998). As previously highlighted, the advantages of remote work could primarily apply to individuals inclined toward or capable of participating in remote work (Kaduk et al., 2019).

Despite this, a significant number of participants preferred working from home. However, space management has become a priority for most organizations, mainly because of increasing operational costs of use, the need for more collaborative spaces and open plans and the need for adjustment. Frequency to accommodate the organization’s rapid growth or expansion (Miller, 2014; Appel-Meulenbroek et al., 2011; Saurin et al., 2008). The respondents found that remote work offered better flexibility, enabled a greater focus on their tasks, increased productivity and resulted in higher job satisfaction. Furthermore, the overall attitude amongst employers and employees toward increasing remote working was positive. However, it is essential to note that the practicality of remote work varies among businesses, as some respondents still prefer in-person work compared to WFH.

The respondents agreed that the management’s perception toward employees expressed improved productivity, reduced staff expenses, improved engagement levels between the employees and managers and improved the company’s retention of employees by offering employees WFH options. Achieving remote working in companies depends on how it is managed (Peters and Van der Lippe, 2007). The participants acknowledged that management has continued to practice remote working conditions for company employees.

One common theme that runs through these categories of themes is that corporate strategies focus primarily on economic angles with less emphasis on social angles. This contrasts with the findings of Knight Frank’s (Y)OUR SPACE (2020) survey, which revealed that global real estate space users were beginning to think beyond the economic, environmental and social aspects of office space use. As stated, prior, these differences in priorities may be the result of the economic packages that various governments provided to organizations during the pandemic, which may not have been provided at the same level for South African companies.

Category 3: real estate market.

Many businesses reconsidered their operating model, opting to shift toward providing all firm operations online using remote work. As previous work suggests, determining changes in the workplace should be considered in organizations applying objectives to consider collaboration, productivity, culture and business in leased space, as adopted by Ancillo et al. (2021). These changes led to structural changes in the real estate market, particularly the office market. Two core office market changes include changes to space demand and changes to lease structures:

• Space demand changes

Several tenants have been observed evaluating the reconfiguration of their space and space requirements prior to lease renewals. Landlords of buildings offering amenities such as coffee shops needed to reimburse tenants for rental remissions during the pandemic. This reimbursement was necessary because tenants could not operate because of lockdowns, resulting in negligible foot traffic within office buildings. Consequently, rentals were waived and recorded as bad debt write-offs to accommodate the tenants. This measure was taken to prevent tenants from being unjustly burdened by rental obligations for amenities they could not access. Additionally, it facilitated positive landlord-tenant relationships and ensured consistent future income.

Currently, the findings suggest office space changes include more remote working policies in demand and space use decisions. Miller (2013) mentions that respondents and previous literature agree that the occupancy rate fluctuates and is sometimes relatively low. It would be naïve to assume this would not be true when remote working is fully implemented. Although no evidence suggests demand for office space is decreasing today (Rode, 2023), referring to the office market remaining the worst because of oversupply, the 2023 quarter two report notes the improvement in vacancy rates while the market nominal rental growth remains positive. The evidence suggests that the demand will eventually stabilize as an effect of remote working. The participants did not put much emphasis on the high possibility that demand for office space will somewhat weaken. One participant mentioned how some tenants expressed a limited requirement to return to the office. The fact that landlords and tenants together form the demand for office space implies that stability in demand for office space is highly probable. However, it is essential to point out that the results do not support remote working as a complete solution. As outlined by Sucheran and Olanrewaju (2021), the analysis of historical literature on remote work diverges from the perspective presented during the COVID-19 pandemic. This shift can be attributed to the distinctive context brought about by the enforced lockdown regulations in South Africa:

• Lease terms and structures

This shift created opportunities for negotiations, as tenants considered relinquishing office space or securing reduced rentals as critical factors in lease agreements. Concurrently, other tenants elected to retain their existing office spaces while implementing redesigns to optimize space usage and efficiency. These changes led to shortened lease durations, reflecting tenants’ reservations about committing to extended leases (5–10 years). Instead, they preferred shorter leases, spanning 1–3 years, to mitigate operational risks. As one of the respondents noted, “so shorter lease terms are being negotiated because of the intention to consolidate and move out.” Although the lease structures appear to be changing, the rate of change does not align with previous studies where leases were being re-negotiated at a mass scale. This may be because leases in South Africa are generally shorter (3– 5 years) than they are in other developed countries; thus, there would not be too long left on the lease after the pandemic. The scope of this study does not consider what firms will do after their leases expire; if this were done, perhaps, there would have been some insight on how lease structures changed several years down the line. However, it is clear that tenants are demanding more flexibility in lease terms, with respondents indicating that tenants are now opting for three-year contracts and break clauses increasingly being sought.

Category 4: employee productivity.

The themes in this category captured the strategies for maximizing productivity in the workplace and supporting infrastructure.

Respondents generally perceive a decline in productivity as one of the main negative impacts of the pandemic, which they associate with working from home. A respondent stated, “[…] I think productivity is definitely a challenge…. unfortunately, there is going to be opportunity cost lost from lack of productivity when people are working from home.” There are other challenges that relate to infrastructure. One respondent stated that “…the set up at home creates distractions and employees are not able to work properly with poor internet connectivity, load shedding, weak laptop batteries die etc.”

Certain companies have implemented various strategies to facilitate collaboration and productivity when employees are in the office. These strategies include adopting hot desking practices, introducing communal areas for team collaboration, establishing pause areas for relaxation and redesigning the office layout to create an open-plan environment. Moreover, companies have invested in power backup solutions for Wi-Fi stability, upgraded employees’ home Wi-Fi connections and provided ergonomic chairs and desks for comfortable work setups. One respondent provided further insight. They stated that:

[…]. not everyone had access to computer, printers and 3G cards, so we obviously had to gear up for it to provide Internet, provide office furniture to some employees including internet services, faxes, furniture, et cetera.

Furthermore, companies have embraced improved software solutions such as Microsoft Teams and Office 365 to enhance communication and workflow and have leveraged cloud computing instead of relying solely on traditional server setups. These initiatives aim to create a conducive work environment that fosters collaboration and efficiency for both in-office and remote work scenarios.

4.2 Limitations

As this study has been based on a qualitative study, there is a limitation on to what extent the findings of this paper can be generalized and transferred to other comparable studies. Also, the qualitative study consisted of ten interviews, which is another factor that can limit generalizability. These factors may have a limited impact on the external validity of this paper, where the findings can be more relevant to owners who saw the impact of the pandemic through the tenants and the decisions that needed to be made. The data was collected post-COVID19 (July–November 2023), so attitudes and behaviors might have changed since then. Moreover, by describing all the steps taken in the method section regarding how the qualitative study and findings have been conducted, a high level of transparency has been ensured in this paper. However, even though a transparent methodology approach makes it clear to other researchers how to conduct the study, it cannot be guaranteed that the same findings will be generated.

The qualitative study includes personal opinions and experiences from participants that differ from one person to another, which is a factor that can impact findings. The findings indicate that the office market will survive the COVID-19 pandemic by including changes to the workplace, use of space, demand and quality of space. Landlords ensuring the design of office buildings need amenities in proximity or within the building, which is essential to attract tenants. Organizations must make cost-effective decisions when leasing space by considering employees’ well-being and options to work remotely. Additionally, the fourth category of themes did not receive robust engagement from the respondents. This may be because productivity, particularly in the service and corporate sectors, is quite subjective, and there is still a lack of convergence about how remote working has affected productivity in the workplace.

5. Conclusion

This research focused on understanding the role of changing working practices in the office sector in South Africa (in the context of the COVID-19 footprints). The COVID-19 pandemic was experienced worldwide, and South Africa was no exception. This required more places of work to close offices during the high peak of the COVID-19 pandemic in 2020 and 2021, with only essential staff being allowed to work during this period. This impacted many companies, which were not fully using the offices they leased from landlords. Even though it benefited tenants who received relief and rental deferments on payments, the spaces were no longer used the same as when required to return to the office.

When employees returned to the offices, companies had to reconsider the required spaces, reduce space, or close down offices. The requirement for employees to return to the office was received with much resistance, and tenants and landlords needed to relook at how best to provide incentives to bring staff back. Many companies have looked at ways to achieve lower operational costs in the office spaces, acknowledging that during the pandemic, many companies saved on the occupancy and operating costs of the offices. The more flexible approach could have a long-term impact on the requirement to lease out space. In contrast to omitting the need for offices altogether, predictions around working from home tend to be closely tied to part-time work from WFH policies. It will be intriguing to observe how companies' encounters with remote work amid the pandemic will influence the nature and magnitude of office space requirements. The findings indicate the presence of specific strategic categories crucial for reimagining and transforming the workplace post-COVID-19.

Although several findings from this study seem to align with studies in various contexts, some remarkable differences can be observed: companies’ reactions and adoption have been driven more by economic factors than by social and environmental factors. This is a stark contrast to the findings in Oladiran et al. (2023), which reported that social and environmental factors are becoming key considerations in office markets in other developed economies. Furthermore, the remote working option primarily discussed was related to working from home, leaving third-space use less prominent. Additionally, lease re-negotiations did not seem to feature actively in the discourse, and this may potentially have been because of the relatively shorter leases in South Africa in comparison to other countries. Additionally, this study reveals that infrastructure is a key challenge to the adoption of remote working. Issues such as power, internet and computing facilities have not been brought up in past studies in more developed economies. This is a valuable contribution to the debates around remote working, which underscores that it is more effective in societies where electrical and information technology support its adoption.

The findings underscore the need for additional research to comprehend the psychological consequences of the pandemic on employees about remote work. This includes the absence of daily face-to-face conversations and informal gatherings. However, as noted in Di Renzo et al.'s (2020) study, it has also facilitated heightened collaboration among employees within the workplace. The findings indicate that to achieve success in remote work (WFH), a well-structured performance review system is essential for any company pursuing such an approach. The COVID-19 pandemic has undeniably posed challenges and transformed our interactions with remote work. The growing integration of technological tools within companies is viewed as a means to enhance remote work in the future, prompting a heightened demand for more adaptable tools that empower employees to manage their tasks effectively.

Based on the research results, the demand and utilization of office space have evolved, giving rise to a decrease in traditional office layouts and the emergence of more open, collaborative spaces. These spaces now incorporate dedicated focus rooms and well-equipped meeting areas with enhanced audio-visual capabilities. This setup supports hybrid work models and online meetings with minimal technological hindrances. Consequently, employees are now better equipped to engage in their tasks effectively. The pandemic's impact has catalyzed irreversible changes, compelling policymakers and business leaders to strategize and prepare. This proactive stance aims to prevent avoidable challenges for employees and companies during future pandemics. A thoughtful approach to the post-pandemic world can usher in positive changes in the office and property sector. This includes the coexistence of both remote work and on-site working models.

Figures

Figure 1.

Emergent themes from the analysis

Notes

1. World Health Organisation.

2. Working from Home.