While most tenants expect that at least 50% of their employees will return to the office by the middle of next year, landlords are also expecting a medium term impact, with the majority looking for the demand pipeline to be at least 10% lower than it was in recent years.
About 42% of tenants are dealing with negative or somewhat negative impact on their business due to Covid-19, according to Colliers International’s survey among tenants. In this context, half of the respondents had less than 10% of employees in the office in September, with another third having between 10% and 50% of the team in the office. The share of big companies, employing over 500 employees, with less than 10% of their workforce in the office is greater than the share of smaller companies with the same levels of presence in the workplace – 63% versus nearly 43%, skewing the impact on occupancy, and the impression that people are not back in the office.
A bigger part of the respondents are moving forward with their hiring plans, and only a small fraction of the companies are currently firing people or plan to do so. Furthermore, quite a lot have delayed their plans for up to one year and will likely move ahead if their economic activity continues perking up.
“Going forward, most companies are either keeping their occupied office surface unchanged or are looking for a moderate decrease, between 10 and 30% and these are fairly equal shares. Still, we note that big employers are more likely to cut back their occupied office space in the future versus smaller ones, thus more sublease spaces would be available. That said, there is still a lot of uncertainty, so the future way of working is yet to be established, with most companies likely planning to pursue a hybrid system accommodating both remote work and office work”, says Sebastian Dragomir, Partner and Head of Office Advisory at Colliers International. (source: Colliers)