Corporate Real Estate Professionals Say That Hybrid Work Will Shrink Office Space Requirements But Lead to Better Work/Life Balance For Workers

Survey Conducted by Colliers at the CoreNet Global Summit in November Defines Successful Utilization of Office Space

ATLANTA, Dec. 15, 2022 /PRNewswire/ -- Hybrid work will lessen the space requirements for many corporate real estate users of traditional office space, according to a survey of more than 500 corporate real estate professionals conducted by Colliers online and at the CoreNet Global Summit in Chicago.

Survey respondents say that better work/life balance for employees is a key advantage to the corporation that implements a hybrid work strategy. Respondents also redefined success in terms of space utilization rates as workers divide their time between remote locations and the office.

Below are the questions respondents were asked and the responses:

What is the impact of the move to hybrid working on long-term average demand for office space users?

• They will need more space: 3.1%
• No overall impact: 3.9%
• 0 to 10% less space required: 4.5%
• 10% to 20% less space required: 16.7%
• 20% to 30% less space required: 29.8%
• 30% to 40% less space required: 23%
• 40% to 50% less space required: 12.7%
• More than 50% less space required: 6.1%

What percentage of office users' portfolios will move from traditional lease to flex leases within 5 years?

• 0 to 10% of leases: 13.7%
• 10% to 20% of leases: 26.8%
• 20% to 30% of leases: 25.7%
• 30% to 40% of leases: 15.1%
• 40% to 50% of leases: 11.8%
• More than 50% of leases: 6.7%

What do you believe is the biggest challenge or disadvantage for an office occupier when the majority of people work remote/from home?

• Loss of cultural identity and cohesion: 34%
• Negative impact on the younger people who need development and coaching: 31%
• Employee engagement and retention challenges: 24.9%
• No disadvantages: 4.9%
• Loss of productivity: 3.1%
• Limits business growth: 1%
• Recruitment challenges: 0.7%

What do you believe is the biggest opportunity or advantage for an office occupier when the majority of people work remote/ from home?

• Better work/life balance: 49.0%
• Reduced occupancy costs for the business: 14.6%
• Easier to recruit: 13%
• Increased employee engagement and retention: 6.7%
• Positive environmental impact via reduced carbon footprint: 5.1%
• Increased organizational productivity: 4.0%
• Saves money on travel for the employee: 3.9%
• No advantages: 2.3%
• Enhancement of cultural identity and cohesion: 1.4%

Moving forward, how do you define "successful" average utilization of office space by an occupier, Tuesdays through Thursdays?

• More than 80% occupancy: 17.2 %
• Between 45% and 79% occupancy: 76.65%
• Below 45% occupancy: 6.1%

Moving forward, what is most important to "successful" utilization of office space by occupiers?

• Managers taking ownership and leadership to ensure time in the office is valuable: 63.8%
• Mandate from the c-suite: 31.2%
• Reducing the amount of space and embracing remote working: 28.1%
• Provide more office space for collaboration and gathering in the office: 22.4%
• Space design and amenities, wellness, and sustainability: 22.1%
• Increase in the number of offices very close to the target population's homes: 14.9%

"The results are insightful," said Scott Nelson, CEO, Occupier Services | Global at Colliers. "This reduction in office space demand for an occupier presents other opportunities for them, which could show up as pure savings of course. However, this could also present the opportunity to shift spend to the experience the employee gets in the office, or help fund cost increases coming elsewhere, such as industrial real estate for some businesses, or people costs to name a few."

"As CoreNet Global has been tracking since the start of the pandemic, the use of the office is evolving into space for collaboration, teamwork, and private space for the employee. While the employee may be in the office fewer days or hours per week, the new configurations mean that the time spent on site will be more valuable and efficient," said Tim Venable, Senior Vice President, Research and Content Development at CoreNet Global.

CoreNet Global is a non-profit association, headquartered in Atlanta, Georgia (US), representing nearly 10,000 executives in 50 countries with strategic responsibility for the real estate assets of large corporations. The organization's mission is to advance the practice of corporate real estate through professional development opportunities, publications, research, conferences, designations and networking in 45 local chapters and networking groups globally. For more information, please visit www.corenetglobal.org and follow CoreNet Global on LinkedIn.

Colliers is a leading diversified professional services and investment management company. With operations in 63 countries, our 18,000 enterprising professionals work collaboratively to provide expert real estate and investment advice to clients. For more than 27 years, our experienced leadership with significant inside ownership has delivered compound annual investment returns of approximately 20% for shareholders. With annual revenues of $4.6 billion and $92 billion of assets under management, Colliers maximizes the potential of property and real assets to accelerate the success of our clients, our investors and our people. Learn more at corporate.colliers.com, Twitter @Colliers or LinkedIn.

SOURCE CoreNet Global