Demand for office reconstruction rising despite construction material inflation

Robert McLean

#cee, #proptech, #development a #architecture

The partial return to the office of employees along with the continued pandemic that’s worsened rapidly during the autumn are bringing with it new demands for changes to the working environment. Offices are becoming more flexible, with adaptive uses made possible by a hybrid model. It turns out that real life has confirmed recently-published research by JLL: that most employees will want to work three days per week in the office and at home for the other two (assuming the pandemic solution allows for it).

The transformation of office work has sparked heightened demand for redesigns of their interiors, despite the rocketing growth in construction material prices. The primary goal of reconstruction projects is get employees back in the office. That’s why these renovations focus on the creation of attractive workplace environments that will facilitate cooperation and support creativity.

This sudden demand for office redesigns is something we didn’t used to see nearly so much of in the past. It’s caused by the fact that many companies chose not to move to new locations during the lockdown periods and it suggests that they have no plans to do so in the near future. However this could change again depending on how the pandemic develops.

And this is all happening at a time when construction material prices are growing in dramatic fashion. In the past three months alone, the price of wood has risen as much as 40%, materials for electronics are up 30%, and raw materials like plaster, steel, glass or glass partitions jumped by one-quarter. On average, the price hike on most construction materials ranges from 20% to 40%.

Offices are transforming into social and business hubs — places for meeting and cooperating, for innovation and creativity. Other key demands for the new office are for heightened security measures and for hygienic workplaces, which has led to yet greater demand for materials like glass and glass partitions.

Along with record-high increases in construction material prices, architects and construction firms have run into delayed supplies of 4 to 6 weeks, which makes up 40% of the usual time needed for the interior reconstruction. Complicating the picture still further is the lack of labor, which is also resulting in increased project prices. The result of all this is that companies are asking us for reconstruction work as soon as possible, because they’re afraid these price rises will continue. We’re seeing this surge in demand for interior reconstruction services across all sector, but most of all in banking, consulting and legal services, where employers need to have their employees in the office.

The coronavirus pandemic is the main cause of the higher prices and the delayed construction material deliveries. A great deal of production and manufacturing was halted for nearly a year, while a construction boom followed the loosening of restrictions. This led to the sell-off of old inventories and a radical increase of prices as demand for materials overwhelmingly outstripped supply. Production capacity has reacted flexibly, but it’s simply not capable of satisfying the increased demand. We don’t expect construction materials prices to fall in the near future.

This means that as a design and build company we have to resolve the collision of two opposing trends. On the one hand, employers want to entice their employees back to work by providing them new workplace environments that are both attractive and safe, as required under the new conditions. On the other hand, we have the huge growth in the cost of modifying office interiors and the time needed for completion. I believe the only effective way to face this situation is for us to provide absolute transparency about the conditions for supplying materials and precise, detailed planning so that we can procure and deliver the project in time and at an acceptable price.

Lucie Loudová is director of the design and build company Tétris


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