From the smoke-filled 1960s offices of Mad Men, to the flat plan financial hubs of the 1990s, other than seeing typing pools ditched for banks of computers, office design didn’t shift hugely. The noughties, post dot-com boom and inspired by the culture of Silicon Valley, ushered in a new era of creative spaces, mixed-use areas, and greater emphasis on co-working. Some of the trappings – the bean bags, for example, or the play areas – may have attracted mockery but there's no question that there have been fundamental changes to how we see office spaces and that worker expectations have shifted. This has brought in challenges around how those spaces are designed, located and serviced and has forced investors to reset their approach to the sector. According to some, 5G signals the dawn of a new era and could be the answer to all ills. This may prove to be optimistic, but it certainly looks likely to overhaul how we work in many fun ways – and in some serious ones too. The shift from the smoky ad agency aesthetic of the sixties to the modern, wellness-obsessed office of 2020 has largely been driven by both technological advancements and societal changes. Tech has allowed us to be more mobile, giving us tablets able to function without power or Wi-Fi cables, doing many things computers can. Firms have become comfortable with bringing your own device (BYOD) regimes. And while we’ve seen a backlash against ping pong tables and bean bags of late, the concept of flexible spaces where people collaborate has been attracting businesses for years.

A key part of this is the changing social structures we have seen; a workplace where many people wake up one day to find that their boss is half their age (at least in the tech world) or that they are sitting next to the boss - many of whom float, predator-style, through the workforce keen to prove their “of the people” status (whilst keeping one eye on the budget). The hierarchical ideal of bosses sitting in plush corner offices whilst workers toil in cubicles is certainly a thing of the past for most firms. Just as many big firms now employ “dress for your client” policies (enabling everyone in professional services to feel like they work for Google) companies across the board have been cutting fixed workstations in favour of hot-desking, although not always to everyone’s delight. Smart firms have heaped on social and communal spaces, allowing workers to congregate and interact away from their desks. But this comes at the physical cost of fixed workstations, meaning that some city workers have been frustrated at turning up and being denied access because of a lack of available desk-space. At the same time, greater recognition and appreciation of the benefits of flexible and home working has exacerbated the drive away from the traditional fixed-desk approach. This in turn has led to companies no longer providing workspaces for 100% of employees, since their offices are rarely full to capacity – a trend which itself makes remote working more attractive.  When you can avoid the commute and work effectively from home why risk being turned away or having to squat in a corner with your laptop on your knees? Ultimately such policies may be creating something half way between a self-fulfilling prophecy and a vicious circle.  So how realistic is a world where the daily grind of commuting is a thing of the past? 5G will certainly make it easier for us to collaborate anywhere. Just as digital twins are revolutionising the manufacturing sector, allowing remote and even predictive maintenance, so too will virtual reality and augmented reality support other office-based pursuits.  In the future it may be that some of the advances we're now seeing in AI and gaming software will mean that we can create wholly virtual workspaces. Complete strangers on other sides of the world can currently interact in shared virtual spaces through avatars in online gaming worlds - there is surely no reason why colleagues cannot one day do the same, at least for some jobs.  Creating avatars to attend meetings or a job interview could be a fascinating way to engage colleagues in a computer-generated world.  As well as creating whole new sub-industries, it could also redefine life for working parents who could (virtually) dip into a board meeting fresh from a nappy change or an egg and spoon race medal ceremony with merely a flick of a headset.

Technically-speaking, offices will have the potential to be fully wireless as 5G will allow for sufficiently fast connections without any wires. But barriers, namely massive walls and cores made from concrete and steel, do exist. Older buildings will need serious refurbishment work, particularly dense ones. This will take the form of small cells and antennas. Although many companies are making huge progress shrinking tech and driving up efficiency, the unpredictable nature of people is likely to mean that things will take time to bed in. What we will see is office design bending further towards the cultural magnet of today’s youth wanting “everything now”. The ability to quickly personalise space - moving from collaboration to private peaceful workspace - will be at a premium. And just as companies think up more dazzling novelties to attract and retain tenants, the likelihood is that better data (whether around happiness, energy efficiency or simple air quality) will also start to empower office workers to be even more picky about where they work. Some fear that this could create a two-tier workforce (comprising high paid workers who can choose and others who cannot), but to an extent this is already the case.  As more and more workspaces become developed however, this should at least put pressure on landlords and employers who are resistant to change to improve their office environments.   The demand for smart buildings will likely increase, with Amsterdam’s The Edge an example of an office space that already uses sensors to analyse data to optimise light and heating. Moves to monitor staff, through sensors on chairs or through facial-recognition, have been less positively received. But if employees see an upside and if things are discussed openly, concerns that Big Brother is watching may fade.  The biggest benefits may not actually be related to cyberpunk-sounding concepts like avatar board meetings or virtual huddles. Cloud based building management systems, or digital twins of entire buildings, could be constructed to help remotely solve maintenance issues. Autonomous buildings may not even need help, with the potential for them to identify their own breakdowns. Of course, with all of these developments there are heightened security risks. For example, given that 5G will enable smart buildings that can regulate their own air ventilation, hackers could gain access to vital functions causing havoc. Security teams will do very well from it.  Whether we have full-on VR board meetings by 2030 remains to be seen, but some experts believe that 5G could create $700bn of value for the global economy by 2030. Of course, phones won’t be the only fifth generation entity in the workplace. With populations ageing across the world and people living longer, expect five generations of actual workers toiling away in many offices.  Although we can expect some huge changes in the next few years it is overwhelmingly likely that the office will evolve, not decline. It's worth remembering that personal interaction has a multitude of benefits – some of which aren't always immediately obvious.  In a world that allows you to log in remotely for the duration of a meeting, turning up in person becomes a demonstration of commitment and value. Investing the time and effort to travel somewhere physically says, very clearly "this relationship and this project are very important to me".  The passive interaction that physical shared space entails would also be lost in an environment focussed on digital interaction. We might think of things like "conversation" and "office banter" as ephemera, but reframe them as "knowledge-sharing" and "relationship building" and their value becomes more apparent.  As a result it is hard to envisage an entirely virtual world where such interactions are lost - future generations may however feel differently.   The new capabilities that 5G will bring have the potential to deliver transformational change to the office sector.  We can expect to see far reaching changes to the way that buildings are configured, to the expectations of occupiers and workers and in the very nature of the occupiers themselves.  The challenge for all involved will be adapting to such changes.

A wireless office?

Facilities management

Alongside energy management, being able to automatically control a building's operations, such as elevators or security, and pre-empt failure will potentially yield savings for owners. Being able to understand footfall, which can be done pretty easily with sensors that track phones, will allow buildings to respond in real time.   German conglomerate Siemens incorporated these types of sensors throughout its new headquarters in the Swiss town of Zug.  One of the advantages of having sensors peppered throughout the building and all talking to each other is that Siemens can monitor and map which areas of the buildings have high and low footfall. That means they can reduce lighting and energy use in sparsely used areas, creating energy savings. The higher speeds and bandwidth of 5G could result in these building management systems being based completely on the cloud, especially if the workplace has gone fully wireless. Critics argue however, that for more complex facilities, such as manufacturing or research buildings, keeping processing localised, through edge computing, makes more sense.

Sustainability

Smarter facilities management will in turn help the shift to greener offices, by offering investors real time insight into the performance of buildings. Climate change has never been higher up the agenda for governments, individuals or corporates, with 23 British commercial property owners recently signing a commitment to deliver net zero carbon real estate portfolios by 2050. But only by “operationalising” sustainability promises will any such pledges be met. This means firstly reducing energy - not always a given in glass-clad buildings with windows that don’t open - and monitoring how and where resources are used. Down the road, AI building management systems will be able to optimise performance, but right now, many buildings still lack basics like zoned lighting systems 5G-enabled offices like will change that. Better connectivity will be able to closely monitor energy inputs and regulate electricity usage through AI controlled lights, heating, and air in-flow, all monitored by thousands of sensors. This Dutch building is 98.4 percent energy efficient, a remarkable feat today, and perhaps the norm in the offices of the future.

– and its reduced latency (how much lag there is). So in the future 5G will become the primary access for the flexible, mobile office of the tomorrow – due to security and ultra-reliability of the networks as well as high speeds and low latency. However, while the huge floorplates of yesterday – packed with cables and power supplies – won’t be needed, distributed antenna systems or small cells will be needed to increase network density and capacity by letting high frequency signals move around people, machines and walls. "To take the example of the Leadenhall Building" says Vijay Sodiwala, Indoor Networks Commercial Director, Wireless Infrastructure Group. "The antennas in there are much smaller than in, say, a stadium environment. At around 20cm diameter by 4cm they’re about the size of a smoke alarm, so they can be discreetly distributed on each floor. There are about 240 antennas distributed across 45 storeys which averages around five or six antennas per floor but given the building’s unconventional wedge shape you have a greater number of antennas on the lower floors. These antennas connect to a series of hubs which in turn connect back to a comms room where we have located our control equipment and mobile operator radios." Yet even though large floorplates are not required, some companies may still be able to take advantage of them. Mark Nallen, Head of Technology and Innovation at Canary Wharf Group says, “For tech firms such as Intel and Revolut, who enjoy having large teams communicating together, large floorplates actually work really well and enable companies to rework space to best suit their working practices whether it’s through the creation of quiet space, creative rooms or collaborative working areas.” Retrofitting buildings such as tower blocks built to accommodate huge servers and lots of cabling to incorporate 5G do present challenges for landlords. "The main challenge with retro fitting any older building blocks is getting the connections to get through the walls and flooring especially when the floor to ceiling heights in older buildings are not large," says Nallen.  "So in a similar way to the duct network under the roads of the Canary Wharf estate as a whole, the buildings are pre-designed with comms riser space for the connectivity required for wired & wireless infrastructure – and ready for any future upgrades – to be installed in.  "Buildings on our estate are designed with dual cores, with two risers – vertical ducts, essentially – that go all the way up the building and allow us to install fibre to any floor, all the way throughout the towers," he adds. "So if the likes of SocGen wanted superfast connectivity for their trading floor, we can easily hook that in quickly thanks to that design." Given the sheer volume of likely devices in the office, especially with many employers adopting BYOD (bring your own device) policies, 5G will likely prove more attractive than Wi-Fi 6 to commercial landlords than homeowners, who have less devices to contend with (see chapter on residential).

Flexible, remote and co-working

Take up of co-working is expected to soar across Europe. JLL in 2018 that it expected flexible space stock across the continent to rise by an average of 25 percent – 30 percent per year in the next five years, adding up to 7 million square metres to the market and pushing the total market size to over 107 million sq. ft. by 2022. As more landlords look to cash-in on the trend, they will need to double-down on infrastructure as without the safety net of a long lease, occupiers will be able to leave at a moment’s notice should a building not be up to scratch. This increase in remote working enabled by 5G will make it easier for workers to move between satellite offices, allowing companies to continue making savings by cutting back full time desk space. While co-working space costs more per metre, the headline cost is lower since workers typically have around 40 percent less space.

New uses for spaces

The higher levels of remote working could mean businesses slash their space requirements as the working world pivots towards virtual offices. Already more Americans are ‘telecommuting’ (working from home) than using public transport to get to work. While the office is unlikely to disappear entirely, employers are likely to be left with surplus space. Once this moves beyond a couple of empty desks it is likely that they will want to consider the best way to use this; especially as it is unlikely to be the same space, or amount of space, consistently. New ways of flexible working are likely to change the shape of the working day as there is less requirement to gather everyone in the same area for large portions of the day. Expect to see occupiers deploying uses such as pop-up retailers and F&B operators to help activate "dead" space to help keep employees engaged, or bigger businesses bringing in SMEs or community enterprises to fill surplus seats.

Benchmarking performance

While more money is pouring into alternative asset classes such as build-to-rent, offices are still likely to form the mainstay or at least a significant part of institutional investor’s real estate portfolios, even if the ways in which we work in them evolves.  For pension funds and insurers, more accurate benchmarking of a building’s performance, and insights such as whether there really is a smart building premium, will help inform their investment strategies. Wired Certification, the global rating scheme for digital connectivity in commercial and more recently residential real estate, provides tenants with an independent, trusted benchmark and the necessary insights for landlords and developers to improve and future-proof their buildings’ digital connectivity standards. WiredScore’s Technical Director, Sanjaya Ranasinghe, comments:

Occupiers will expect connectivity in their buildings just like any other utility, and that landlords will need to be forward-thinking in making sure it is up to scratch. Therefore, there is an onus on landlords to provide 5G properly themselves, as otherwise the building’s connectivity may be hampered by occupiers. "And if you don’t get the wireless right, occupiers will start setting up their own, which can play havoc with bandwidth in modern open-plan spaces," says Cliff Dennett,  Head of Commercial. Bruntwood SciTech – Birmingham. "Some time ago in one of our buildings, customers had set up dozens of networks in 12,000 sq ft of workspace – which meant no one had a good connection.

Valuations and LeasinG

Investment Opportunity

Depending on how it is provided in the future, there could also be scope for investment into the provision of 5G by real estate and infrastructure funds.

“In terms of infrastructure investors, 5G infrastructure will be an interesting investment opportunity. The timing around the user demand and technology development will determine how soon these opportunities become available to investors in different markets.” There will be a considerable investment into the fixed infrastructure of 5G over the coming years, while authorities looking to guarantee provision could begin to look for funding partners. Simpraga says: “LGIM Real Assets is open to looking at 5G-related transactions that fit our investment criteria: assets with stable cash flow profiles, high barriers to entry and low technology risk. So far, we have seen limited market activity in this area, but we would expect the activity to pick up as the technology and business case for 5G evolves,” she adds.

Having AI take a more active role in performing mundane or administrative tasks will free up time and create a raft of efficiency savings. Most people expect AI to support, rather than replace, staff. Gartner estimates that in 2021,

Productivity and automation

Connectivity (e.g. holograms, HD conferencing)

As we enter the era of a truly global economy, connecting clearly with co-workers across the world will be a bigger priority than ever, leading some to look beyond higher quality video-calling and considering holograms as the future of long distance co-working.  A long-time staple of science fiction, holograms have been the stuff of speculation for years. In 2012 for example, music festival Coachella projected which promptly captured the public imagination, but ultimately proved to be an old stage trick using projectors and mirrors, not the real deal. So why haven’t we been able to beam Star Wars’ Princess Leia directly into our boardrooms up until now? Sitting beside a holographic colleague has only been made achievable thanks to 5G’s enormous bandwidth. Thinking of a hologram as thousands upon thousands of data points in 3D space might reveal why transferring this volume of data simply couldn’t be achievable across older networks without significant compression, which would leave your colleague looking like a distorted, pixelated mess. It’s through companies like DoubleMe that is beginning to look like a reality. Based on an advanced 3D camera, the firm’s HoloPort technology allow users to create a two-way link of life-size holograms in full colour. We have to consider whether this will become the norm, however. Video calling services such as Facetime and Skype seemed as futuristic as flying cars in the Back to the Future series, yet they’ve quickly become a standard, and even boring, part of the working world.  It might be that this technology is better suited to entertainment, with companies such as Voxon Photonics already , an arcade machine capable of producing 3D holograms. This use case may catch on, but whether or not the adoption of holograms in the workplace loses its novelty remains to be seen.

Collaboration and remote working

The workplace is awash with online collaborative tools and meetings systems like Skype, but the experience is still very much a binary one. Slack for example requires other users to add to the conversation, and this is unlikely to occur in real-time. However, 5G’s seamless connectivity could usher in an era of Augmented Reality and Virtual Reality environments, where team members could work on projects in real-time. 5G’s seamless connectivity making Augmented Reality and Virtual Reality a real possibility could mean that meetings with colleagues hundreds of miles away feel like everyone in the same room. Given that conference calls can still be a somewhat stilted experience, feeling that you are in the same room or space as other colleagues may help boost collaboration. This could apply to whether a London based team was working with a US based office or if one of the managers was working from home. Indeed, remote working is increasing, with 70 percent of the global workforce working remotely at least once a week, according to IWG (formerly Regus).

Kinetic is a New York based company developing wearable technology that reduces workplace injuries. The company’s REFLEX product has the ability to reduce workplace injuries by 84 percent by automatically detecting high risk postures and positions, while simultaneously providing feedback to its users when high-risk motions occur. The wearable device attaches to a worker’s belt and monitors activities that put them at a high risk of injury, such as unsafe postures, jumping off vehicles or slips and falls. To reduce injury during lifting, the device alerts workers with real-time vibrations that alert them to the potential risks. With 5G, the transfer of information from the wearable devices can occur faster and potentially prevent workplace injuries from happening at all. The company recently raised a $4.5m seed fund, backed by an experienced group of technology investors such as Crosslink Capital and Primary Venture Partners. UiPath is a leading Robotic Process Automation (RPA) vendor providing a complete software platform to help organisations efficiently automate business processes such as tedious and time-consuming administration tasks. The UiPath Enterprise RPA Platform delivers rapid automation of manual, rules-based, repetitive processes. The technology allows anyone to configure computer software, or a “robot”, to emulate and integrate the actions of a human interacting within digital systems to execute different business processes. The software has been used to automate millions of tasks for businesses and government organisations all over the world – improving productivity, customer experience and employee job satisfaction. With 5G, UiPath would be able to scale up their platform to bring down costs for their clients and improve the end-user experience. Greater connectivity will inform the company’s software on processes that could be optimised, making it easier to integrate the technology with their clients’ pre-existing systems. UiPath recently partnered with CAI Software, a recognised leader in delivering automated management processes, to teach accountants new RPA skills. AimBrain is a technology start-up based in Canary Wharf, London, that uses five biometric technologies to provide user authentication: facial and voice identity; aggregated face plus audio; behavioural authentication (which tracks multiple characteristics such as range of movements on devices) and anomaly detection which looks for patterns of fraud before the user profile is known. For example, AimBrain is working with a credit card company in the US to help stop fraud related to new credit card applications by halting fraudsters abilities to use other people’s details to get a credit card. AimBrain also uses a cloud model to remotely authenticate companies' employees on their computers and mobile devices. AimBrain uses cellular networks to connect biometric data to the platform’s infrastructure to trigger authentication. This technology will affect the office and workplace sectors, as breach costs continue to rise and hackers become increasingly sophisticated. With 5G, AimBrain’s technology will be able to act a lot quicker to threats from fraudsters.