Savills : How ‘corporate nomads’ are causing real estate models to evolve

Working remotely is not a new concept. Technological evolution, fast internet connectivity and cloud computing have enabled people of certain professions, especially freelancers and consultants, to work from almost anywhere. In 2015 digital nomad Pieter Levels was projecting that there will be 1 billion nomads by 2035 across the world. According to a recent Citrix survey, 60 per cent of respondents believe that permanent employees will become rare by 2035.

What the Covid-19 pandemic has changed is the perception towards remote working. It has become acceptable to many corporates and shown that it can be equally productive and may offer a better work-life balance to some employees.

During the past year, a number of people have taken advantage where possible to work not just from home, but to rebase themselves in places that offer a better quality of life or the opportunity to combine personal interests with work. A US survey conducted last summer by MBO Partners estimated digital nomads in the country increased by 49 per cent year on year to almost 11 million people, accounting for about 7 per cent of the US labour force.

Although this is not likely to become the prevailing profile of a remote worker, we are definitely going to see the number of digital nomads rising. The new 'corporate nomads' may become a new type of tourist, who spends longer than a typical holidaymaker at a destination, working remotely away from home.

Pre-pandemic data from Eurostat and the US Bureau of Labor Statistics showed that about one third of workers would work occasionally from home in economies such as the US, the Netherlands, Sweden and Finland. They could become the potential pool of future corporate nomads.

Countries, especially typical tourist destinations such as those in Southern Europe, are already competing to attract these future corporate nomads. What will this new type of 'bleisure' travellers be seeking? Fast connectivity, on demand services, flexible accommodation, to name a few.

From a real estate perspective, corporate nomads will require flexible housing and office space. Co-working spaces will need to expand and offer cross-country membership packages to allow these nomads to work from any workspace in any country they find themselves in.

The options range from co-living spaces, apartments and hotels across a network of locations. Mid-term rental platforms such as Flatio and NomadX experienced a rise in demand last year. Flatio recorded a 20 per cent growth in bookings year on year in the first nine months of 2020. Airbnb, which has been hit by the drop in tourist travel, is also shifting towards long-term reservations of one to six months.

Some hospitality sector players have also become creative and are starting to capture a share of the demand. citizenM, for example, has recently announced a global passport - a subscription service allowing remote workers the ability to stay in any of citizenM's 21 hotels around the globe, making use of rooms and meeting facilities.

With many countries still in lockdown, once restrictions have started to lift we will see the true long-term effects of corporate nomads on the real estate market.

Further information

Contact Eri Mitsostergiou

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