Prior to covid, the increased focus on employee welfare and mental health in the workplace was tipping the scales in favour of a better work/life balance and flexible hours. Now, following the relaxation of government-mandated work from home orders, combined with market buoyancy, we are entering into a power-struggle between individuals and the corporate. Are we going to see a major pushback from companies over worker-power? Or will those companies that refuse to bend to modern lifestyles start losing out on top talent? If we are on course for a recession, and the hiring market slows down, employees may find they are no longer able to have a say over where they work.
As highlighted by the recent merger of Blackstone’s The Office Group and Brockton Capital’s Fora, as well as Alpine Grove Partners’ acquisition of The Argyll Club, the flexible working sector is proving attractive to investors looking to capitalise on companies reducing their office footprints and enticing employees back to the workplace through various amenities. What seems to be becoming clearer is that “flexible working” in one form or another, seems here to stay, at least in those industries where it is physically possible, but what impact will it have on office cultures, training juniors, and productivity? In this edition’s ‘As Raw As It Gets’, we asked individuals across the real assets sector for their insights and views on the matter.
One sector that is not so affected by this debate is the life sciences real estate sector. Due to the necessity for lab space for work, the asset class has remained robust and resilient over covid, with investors increasingly flocking to a sector that raised a record level of venture capital funding in 2021. With existing stock in limited supply, and managers getting increasingly desperate to grow their exposure, pricing is becoming unreasonable. To make up for this shortfall, developers are repurposing other assets, with retail a prime candidate due to the underlying features such as high floor-to-ceiling height and goods lifts. But here the sector faces another shortfall, this time in terms of human capital, as there are few people currently with the right skillsets to design and build specialised lab space.
Many life science companies are looking to grow their teams, fuelled by the influx of capital, and need the space to do so. There will be some investors that can capitalise on this growth, but we are likely to see a shakeout in 2022 and 2023 as those firms that aren’t wholly committed back away due to the pressure on pricing and talent. In this newsletter, we’re honoured to feature Dr. Glenn Crocker, Executive Director at We Are Pioneer Group and Senior Consultant at JLL Life Sciences, who gives his views on the life sciences sector.