Will hybrid office become standard in shopping malls over the next five years?

Image source @ Visual China

Wen | remain serious

At the end of 2021, Chinese mainland's first Starbucks co-space concept store opened at Raffles City Shanghai, and last month, IWG announced that it would lease the entire Office Building of Swire 8QRE. As early as 2017, nearly 20 co-working and shopping malls "held hands" successfully.

If we say that the wave of co-working in shopping malls in 2017 is simply to accumulate popularity for shopping malls. Then, standing in the current background, under the influence of many factors such as the intensification of commercial real estate stock, the rise of mixed office models, and the continuation of the global epidemic, the re-"hand-in-hand" between office space and commercial real estate may become a new format in shopping malls (commercial real estate), and be given the value expectation of revitalizing assets and space appreciation.

This article focuses on the new generation of consumer demand, mixed office scenes and other dimensions, to explore whether "shopping mall + office space" will be a high-quality combination model?

How can the new way of life and work caused by the epidemic be satisfied?

The essence of the shopping mall is to serve as a platform to connect merchants and consumers to meet the needs of consumers.

However, today's consumer demand is facing a new round of changes:

1. Changes in the target population. Internet natives Generation Z is taking over the main baton of consumption, aesthetic improvement and vision expansion are typical characteristics of this generation, they pay more attention to customization and personalization, chasing trends and fashion. In a sense, shopping malls represent the fashion and trends of a city.

What Generation Z needs is naturally not the traditional shopping consumption model, but the new experience that hopes to consume in different scenarios in a mall, which is not satisfied by the traditional format.

2. Changes in demand under the influence of the epidemic. As the global pandemic continues, hybrid work is a new trend, and flexibility is at the heart of the future of work, which not only enhances the sense of well-being at work, but also provides a better work-life balance.

When the profession has the dual nature of work and life, then the human-centered life-work scenario will be reconstructed.

Located in the center of San Francisco, Westfield opened a new office space called Bespoke as early as 2015, and created a "front store and back office" scene, setting up a display area for online shopping product experience, venues, rest areas, reading rooms, etc., to meet the diverse needs of consumers.

In 2020, Japanese department store giant Sogo Seibu also opened a workspace that can be used for remote work, introducing a "coin space" operated by coin space, placing 43 seats in a space of about 152 square meters, providing power and Wi-Fi to meet consumers' office needs.

It is not difficult to see that in the past, shopping malls mainly carried a lifestyle covering consumption, leisure and food, and with the changes in the target population and environment, the future output will be more inclined to a new way and new concept about work and life.

At present, both real estate companies and office space brands are actively laying out in this model. Office space brands such as WeWork, Ucommune Workshop, and Dream Plus all have practical cases of landing shopping malls, and Longhu has launched its own office space brand "One Exhibition Space".

Shopping malls have the natural dna of "test scenes"

Whether it is a real estate company or an office space brand, why do you set your sights on the shopping mall scene? The reason is that shopping malls have the natural genes of the experimental scene of a new way of working and living.

In the past, shopping malls mainly met the leisure needs of users such as consumption, entertainment, food, fitness, etc., and were a typical space carrier outside of 8 hours, in other words, the shopping mall experience was a "lifestyle".

But at present, it is not enough to meet the "lifestyle" scene, and shopping malls also need new packages to adapt to the needs of contemporary people.

For example, the need for hybrid office.

In the context of the ongoing epidemic, finding a balance in living and working spaces is a just need, and in the future, hotels, coffee shops, restaurants, shopping malls and even other public places may gradually develop into temporary office places for users.

The creation of the "life scene" itself is the accumulation of many years of experience in the shopping mall, which is a natural advantage, in the satisfaction of consumers' life needs, the operator of the shopping center on the format ratio, planning and positioning actually has a very mature system behind it, and there is accumulated data support. If on this basis, trying to combine life + work scenarios is a icing on the cake for its long-term development.

Assuming that the shopping mall also provides new scenes of life and work, for users, the most intuitive effect is that in the same large space, you can enjoy the convenience of catering, fitness and shopping that the mall itself has, and at the same time, you can switch freely in the diversified small space such as office space, meditation space, reading space, conference space based on the mixed office scene, to ensure the concentration in different scenes, which can greatly improve work efficiency.

Of course, the new model of hybrid office will put forward new requirements for the new operating model of employees, places and processes, and in the creation of scenarios, it is also necessary to rely on digital and intelligent means to improve the convenience of work, such as booking meeting rooms through small programs, completing catering reservations, online payment and so on. In the design of the scene, it needs to be handed over to professional designers, such as creating an office environment that can be focused, a conference space that is not disturbed by the outside world, and so on.

Another example is the needs of a new generation of consumer groups.

According to statistics, by 2035, the total consumer expenditure of Generation Z is predicted to reach 16 trillion yuan, which will bring new impetus to the development of commercial real estate. In the "Research Report on the Current Situation and Trend of the Workplace of Gen Z" released by Zhaopin, it is pointed out that the Gen Z population attaches more importance to the office environment.

Behind this, how to meet the life and work needs of young people is a huge market cake. The living format of shopping malls has gradually approached the needs of Generation Z, such as actively introducing new formats such as tide play and two-dimensional elements; creating commercial spaces such as Tianmuli and TX Huaihai that better match the aesthetics and styles of the younger generation.

On this basis, if you can provide a mixed work space with vitality, appearance and personality, and establish links to multiple scenes, you can make young people more able to find a sense of belonging in it and enhance the stickiness of users.

Shopping mall + office space = superposition of space value

"After the epidemic, the relationship between office owners and corporate tenants will no longer be a simple lease and leased relationship, and out of the need for self-innovation, enterprises will pay more attention to whether the office environment can bring greater empowerment and achieve excess growth." Tong Sun, managing director of enterprise customer solution development at JLL, has said.

The same logic applies to the relationship between shopping malls and office spaces. The model of shopping mall + office space, in the long run, must be the superposition of space value.

For the shopping mall that does the "field", the essence is asset management, in today's commercial homogenization, the operator needs to consider how to improve the operational efficiency and efficiency of the "field", truly meet the consumer at the same time, but also can enhance the mall revenue and brand premium.

The office space format is novel, the leasing is stable, the design texture is textured, and it has a freshness and topicality; in the design, it can digest the dead corner of the moving line and improve the utilization rate of space. For shopping malls, the office space brand is a high-quality merchant that can revitalize assets and realize asset appreciation; in addition, as a space with both aesthetics and design, it can also be used as a highlight of shopping malls to attract users and extend their stay time.

There is an interesting set of data, since the outbreak of the epidemic, consumers across the country have significantly increased their shopping time after visiting shopping malls, and consumers who have spent more than 2 hours have increased by more than 10% compared with the epidemic. This shows that the operators of shopping malls are already adopting methods to improve the stickiness of users, and the importance of stickiness and residence time to shopping malls.

On the other hand, when consumers have more links in the mall, they can divert traffic to each other, and even convert visitors into mall members and fans of the brand. Now the office space is also trying to empower other formats in the mall, such as through the integration system, providing event venues, ecological community construction and other forms, feeding back the traffic of shopping malls and improving user stickiness.

epilogue

According to statistics, the scale of commercial real estate investment in 2022 will exceed 300 billion, but the market competition is fierce and the consumer demand of the customer group has changed, and commercial real estate needs to pay attention to refined operation and innovative development capabilities.

In the future, commercial real estate needs to meet people's way of life and work, and output attitudes and concepts for life and work through the integration of business formats. From this point of view, hybrid office may become the standard in shopping malls in the future.