Business environment trends
Despite the coronavirus pandemic, 2021 was an excellent year that challenged our capacity for flexibility, sustainability and creative business value for existing and future tenants as Castellum continued its expansion in the Nordic region.
The coronavirus pandemic strengthened the megatrend that is driving development in the property industry and changing people’s behaviours. Digital working methods were developed and patterns of consumption changed over an extremely short time. Harvard economics professor Edward Glaeser is one of the world’s leading experts in urban construction. He argues that we can learn from the pandemic the same way as people did during earlier catastrophes, in order to create more flexibility as well as better and more sustainable cities and communities.
A flexible work life
In 2021, remote working continued to be the reality for many people, who had to learn to work remotely when the pandemic broke out in 2020. Demand for a flexible working life is significant and interest in coworking increased in 2021. Coworking, which is regarded by many as the work method of the future, involves workplaces with full service, shared spaces, meetings and networks. The contracts are short-term and provide great flexibility in scaling office space up or down on short notice as needed. The study that Castellum conducted among 2,000 office workers in 2021 shows that there is significant interest in coworking. It is a resource-efficient solution that will change the entire market for office space, replacing today’s fixed office solutions for many companies. Through its subsidiary United Spaces, the Nordic region’s leading coworking company, Castellum offers coworking spaces in Gothenburg, Uppsala, Stockholm and Malmö.
One consequence of this rapid digital transformation is that we are doing more of our shopping online. E-commerce increased during the pandemic and is expected to continue to grow over the next several years. During the second quarter of 2021, 79% of Swedes stated that they shopped online at least once a month. This development is impacting our cities, creating a need for semi-central properties and flexible warehouses at strategic locations. The Economist reported on major shortages in storage capacity around the world, since e-commerce requires three times as much inventory capacity as normal stores. Castellum, which has long been Sweden’s largest player in logistics properties, strengthened itself in 2021 in the field of logistics and has a firm logistics presence in the country’s three metropolitan areas.
Values and health
Questions of values are impacting our behaviour to a much greater extent, in pace with millennials taking up a larger share of the labour market. This age group, born between 1982 and 2004, have high expectations of their employers. Health is now the key question for young people, and issues of values also rank high, as the Deloitte Global 2021 Millennial and Gen Z Survey shows.
Health in workplaces
Castellum’s report, Framtidens arbetsliv (Work Life of the Future) states that health is the strongest driver for young people in their choice of careers. The report shows that millennials would rather cut back on their working hours and salaries than risk their mental health. In 2016, Castellum was the first in the Nordic region with WELL certification, which has enabled the integration of health into all of the company’s properties. WELL is based on ten concepts that impact human health: air, water, diet, light, movement, comfort, sound, material, wellness, and a sense of belonging (innovation). Castellum took further steps in 2021 by joining the WELL Portfolio, a new programme for certifying entire property portfolios. Instead of focusing on one property at a time, Castellum can focus on health and well-being in our asset portfolio more thoroughly by joining the WELL Portfolio. In an initial step, Castellum has joined all its office properties in Stockholm, Gothenburg and Malmö – corresponding to an area of 419,462 square metres – to the WELL portfolio.
As the proportion of millennials in our workplaces increases, the values at workplaces change as well. More of them are vegetarians, and they think carefully about how they travel. The coronavirus pandemic has put air travel on hold, but we noted a recovery in 2021. But what will air travel look like in the future? In Castellum’s report, Framtidens arbetsliv (Work Life of the Future) the majority of responses say that values are crucial in the choice of employer and that values concerning the climate, health and social responsibility are the strongest. In these areas, Castellum has unique offerings and take a lead in offering both healthy and climate-smart workplaces and services. For example, coworking sites where child care, green dry cleaning and yoga are available.
At the 2021 climate summit in Glasgow, the world’s leaders were more intense in their view that action had to be taken to avoid a climate catastrophe. The climate risks were highlighted as the most serious for the economy and humanity. Increased demands are seen especially among millennials. It is no coincidence that Swedish climate activist Greta Thunberg has become one of the world’s most influential teenagers.
Ambitious climate goals
The construction and property industry represents one fifth of Sweden’s emissions and generates one third of all waste in Sweden. Castellum is an industry leader in sustainability according to external sustainability evaluations such as the Dow Jones Sustainability Index and CDP, and for the sixth consecutive year in 2021, Castellum was named the world’s most sustainable company in the office and industrial sector according to the Global Real Estate Sustainability Benchmark. Some time ago, Castellum set itself ambitious goals of being climate neutral by 2030 at the latest. The company’s carbon emissions come primarily from the manufacture of materials that are purchased in conjunction with new construction and reconstruction.