executive summary
In our 4th annual survey, we engaged over 100 organizations to understand the evolving landscape of hybrid work and its implications on recruitment, workplace strategies, and real estate decisions. The findings underscore a continued shift towards flexibility, sustainability, and strategic space utilization.
Only a minority try to reverse hybrid policies
Despite a minority of organizations advocating for a full return to the office, remote work allowances continue to increase, averaging 2.6 days per week. This trend reflects a sustained commitment to flexibility and employee autonomy in what remains a tense employment market.
Stabilizing Office Attendance at 40%
Return-to-office rates have stabilized at 40% for over a year, indicating a new equilibrium in workplace attendance. However, actual attendance often falls short of the required presence across various sectors, highlighting the need for adaptable workplace strategies.
Rising Office Vacancy
As a result, our projections indicate that 120 million square meters of office space will be added to the current vacancy in Europe by 2030. This anticipated increase necessitates proactive measures in space optimization and innovative real estate solutions.
“Workplace Rigidity Index”, a new way to compare RTO policies
Our newly introduced Workplace Rigidity Index enables companies to assess the flexibility of their real estate and location strategies. Embracing flexibility is increasingly recognized as vital for attracting and retaining top talent.
Prioritizing ESG Initiatives
ESG considerations have become central to corporate strategies. Occupiers are focusing on creating sustainable workplaces, including the development of active mobility infrastructure, to reduce carbon emissions and promote environmental responsibility.
respondents
We collected 105 responses from small to large companies, representative of all business sectors, for an estimated 3.0 million employees.
Respondents
(Mostly Heads of CRE)
Estimated Number
of Employees
- Banking, Finance & Insurance
- Business Services
- FMCG
- Law
- Life Sciences
- Logistics & Manufacturing
- Public Sector
- Real Estate & Construction
- Technology, Media & Telecom
Hybrid policy
The average remote working allowance continues to increase slightly year-on-year.
Remote Working Allowance
Remote working allowance evolution
(days / week).
- 1 day
- 2 days
- 3 days
- 4 days
- 5 days
At c. 40%, the actual office attendance remains stable and below policy in nearly all sectors.
- estimated return to office
- required return to office
Desk-sharing policy
Stagnating low attendance rates continue to push more aggressive desk-sharing policies.
Share of companies with a desk-sharing policy
Desk-sharing ratio by sector
Shown as number of desk per employee.
workplace rigidity index
Urbanite's Workplace Rigidity Index is a new indicator assessing the level of flexibility employers provide regarding where employees can work from.
Workplace Rigidity Index
.svg)
Number of days required in the office
Enforcing the return-to-office
Work from adifferent country temporarily
Work from adifferent country permanently
Sectors valuing in-person collaboration the most are also those that tend to adopt the most rigid policies. This is especially true for law firms. Companies that have a large non-office-based workforce (as Industrial, FMCG.) tendto adopt more rigid policies to limit tensions between those that can and can't work.
Companies that have a large non-office-based workforce (as Industrial, FMCG..) tend to adopt more rigid policies to limit tensions between those that can and can't work.
Grasping the company size and sector improves the view on occupancy rates, space reduction
As a result of stagnating attendance rates, companies started to take stock of their surplus office space and are planning to reduce their office occupation on average by 13% by2030. This shows a decrease compared to last year as companies have started the reductions alongside lease renewals. Whilst the average lease length in Europe is now around 5 years, many older leases still have up to 10 years. Therefore, the complete occupational alignment will take over a decade.
Sectors with the lowest attendance rates (highest remote rates) such as the Public sector, TMT, or Financial Services are also the ones planning the strongest space cuts. Sectors where offices represent only a small fraction of the real estate portfolio and therefore cost base (Industrial or FMCG) are less aggressive.
Aligning your footprint is not only a financial duty - it also has a major social impact
All together, the 100+ respondents to our survey are planning a space reduction of ca. 3M sqm (30M sq ft) by 2030. If we extrapolate that to the entire European and US office markets, it could add up to respectively 120M and 75M sqm of office vacancy to the market. If reconverted to residential, it could accommodate up to 3M inhabitants!
Our global project experience and the attendance figures of our survey provide us with evidence that the quantum of underutilized space is materially higher than the planned prudent reduction of 13% reported.
Occupied
Vacant
Planned Reduction
Conversion potential
Survey Respondents
27M sqm
N/A
3M sqm
= 45k resi units
Europe *
980M sqm
80M sqm
120M sqm
= 1.8M resi units
US *
500M sqm
120M sqm
75M sqm
= 1.1M resi units
Survey Respondents
Europe *
US *
Occupied
27M sqm
980M sqm
500M sqm
Vacant
N/A
80M sqm
120M sqm
Planned Reduction
3M sqm
120M sqm
75M sqm
Conversion potential
= 45k resi units
= 1.8M resi units
= 1.1M resi units
recruitment strategy
More than half of our respondents are adjusting and expanding their recruitment strategy to new geographies in order to reach new talent pools.
place of work
Percentage of companies that will allow...
Working from abroad permanently
Working from abroad temporarily
Working from other existing offices
Working from coworking & flex spaces
Critical infrastructure & services when choosing a building
What are the most critical factors when selecting and office building (in percentage of respondents)?
Mobility
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