Future trends after Covid-19: What are the hot topics?

June 2020,

Roger Krieg MRICS, CEO Office LAB AG

Office LAB is the market leader of Swiss coworking providers.Coworkers work more efficiently with us because they work in anenvironment that is tailored to their needs, making work simplyinspiring. We also offer added value with our partners and initiativesand enable great networks and important market access.

Office LAB – More than an office.

Vision

Economic signals after Covid-19

Current situation

➢ Europe risks a recession for 2020

➢ Increase of non employment rate from 2.9% to 3.3% (April 2020), risk to climb up to 4% by end of the year forSwitzerland

➢ Strong short-term government debts of approx 40 billion related to Covid-19

➢ Risk of 2nd wave

➢ Debts of companies and uncertain business development perspectives

But:

CFA indicator points to upswing in summerThe CS-CFA-Society-Switzerland-Indicator, which measures analysts' expectations, now (end of May 2020) stands at +31.3 points, as CS announced on Tuesday. In the previous month, it had already recovered from its dive in the wake of the Corona crisis and was positive again at +12.7 points. In comparison: In March it had dropped to a multi-year low of -45.8 points.

How companies react on Covid-19

What SME companies consider now:

➢ Stop investments and focus on current cash flow

➢ Stabilize and reduce costs (infrastructure, people)

➢ Boost in digital business and processes

➢ Preparing for post Covid-19 (phasing in new normal, recover business, adapt business model)

➢ Prepare for next crisis (2nd wave or new crisis)

➢ Build up a BCM Plan

➢ Adapt Workplace to new hygienic standards

How to adapt to new workplace standards?

Meeting Rooms

Current

New Normal

Social Space Team Space

Source: Steelcase / Navigating Whats next May 2020

Tenant view: flexibility & resilience

Technologies CO

VID

-19

Portfolio

ORGANISATION & CULTURE

Demandoffice space

Home officeremote work

2019 2020 futuretomorrowtoday

Thesis 1: drastic workplace reduction expected

"The trend towards a multilocal work culture

will be significantly accelerated by Corona.

According to industry experts, the decline in

Office space turnover already up to 25 percent

(Q1 2020 compared to Q1 2019).“

ZIA. – Die Immobilienwirtschaft 14.04.2020

Thesis 1: drastic HQ workspace reduction expected

New workplace concepts outboundExpl. coworking, corporate coworking, splitting offices, shared offices

100%

70%

Dedicated Non territorial Alternative

Working@home

Volume before Covid-19

Meeting / workshopclient projects

After Covid-19New work conceptsReduction of fixed office space

Reduction of existing workspace fromcorporates HQ up to 30% to 50%.

New workplace concepts• Human centric designed• Starbucks generation• More functional and social• High quality, best performance

Cost / budget shift to employees- New Swiss regulation for remuneration

of expenses and home office space arein discussion

Thesis 2: Overnight digital shift for shops

Online trade will grow by 10% in 2018 and by 8.4% in 2019*. In 2020 this figure will be massively higher and above all sustainable

* VSV Versandhandel.ch

Thesis 2: Online and offline, effects on rent space

9’426 EUR / m2

Rev

enu

e E

uro

/ m

2

Rea

l Est

ate

Today in Germany (2019)

Amazon (2019)Many shops are dying because their business model no longer meets current needs. Corona has only increased this effect. The shops that have come through the crisis will build their digital business massively.

The consequence for property owners are:

Shops in Core / Core+ : demand still stabile

Shops in Value add: decrease (turnover / m2 to deep)

Warehouses / logistic areas : increase parallel to e-shop revenue

3’076 EUR / m2

Thesis 3: Risk of value loss, B / C locationsYoung people and middle agers want to live and work in the center and be a part of a urban community.They want to work in the city or at home, but not in a «second class» real estate or location

Value added / enhanced

➢ Receive more pressure for commercial space

➢ Real estate and space must differentiate themselves from classic offers

➢ Existing properties have to be renovated and brought up to the latest standards.

➢ The owner invests in standardized office spaces, and makes available for tenants on demand

Thesis 4: Shift of capex to opexNEW tenant are looking for:

➢ Less crises exposure➢ Easy adaptable to business needs➢ Risk avoiding➢ Capital in core / running cost in infrastructure➢ Share common and project space

Real estate owner try to:

✓ Decrease lease duration / flexibility of space✓ Provide new smart services / service on demand✓ Invest in tenant fit out upfront, ready to use now✓ Reduce investment and risk for tenants✓ Provide serviced space as team offices, coworking,…

Thesis 5: Digitalisation takes on speed

The new pressure comes from inside, because people want to have the comfort.Previous digital markets were opened up for marketing reasons.

push force pull / push force pull force

Thesis 6: smarter cities are safer cities

AI object-analytics AI object-tracking AI speed heatmap

AI bicycle-tracking AI origin-destination traffic© SWISSTRAFFIC AG 2020

Tracing App

Thesis 7: Subscription economyC

ap

ex /

lo

ng

term

1990 2000 2010 2015

Opex /

Short term

Reduction of capital invest

& service when needed

=

flexibilisation and risk

reduction for clients

2020

Thesis 8: new BCM

Workplace Strategy

Business Processes

Environment

Disaster / Recovery

People / Ressources

Data Protection

Market / Sales

Product Performance

Business Spec.

Thesis 9: adapted FM Services

➢ New services from FM Providers

➢ Monitoring for critical areas

➢ Occupancy tracking / management

➢ Flexibilisation and adaption of services

➢ Digital solutions

Source: Apleona Germany May 2020

How Office LAB act on COVID-19

Office Space / building marketing

Property management on site

Office design

Flex / fix desk

Office space 3rd party

Fully prepared offices

Team offices

Sp

ace

Ma

na

ge

men

t

Fa

cili

ty a

nd

Pro

pe

rty M

an

age

men

t

Meeting / Workshops / Community

Community management

Concierge services

Office management

Co

wo

rkin

g /

Wo

rkp

lace

Serv

ices

Owner representative

Managed building services

➢ Coworking as enabler for a dynamic building

➢ Services for all the tenants

➢ Owner representative

➢ Combination of tenant and service contract

Who are the winners?

➢ Real estate companies and suppliers offering flexible solutions for tenants

➢ Quality vs. quantity

➢ Core / core+ / warehouses

➢ Spaces offerings in attractive and strategic locations

➢ Work life balance

➢ Companies offering flexible working models (employer branding)

➢ Coworking spaces

Office LAB AGBaslerstrasse 608048 Zürich

+41 43 960 97 40joinus@officalb.ch

More than an Office