Colliers: Hybrid Work Will Shrink Office Space Requirements, Lead to Better Work/Life Balance
Colliers, Toronto, reported hybrid work will lessen office space requirements for many corporate users and could better work/life balance for workers.
Colliers surveyed more than 500 corporate real estate professionals online and at the CoreNet Global Summit in Chicago last month.
“This reduction in office space demand for an occupier presents other opportunities for them, which could show up as pure savings, of course,” said Scott Nelson, CEO of Occupier Services at Colliers. “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.”
Tim Venable, Senior Vice President of Research and Content Development at CoreNet Global, noted offices are 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,” he said.
The survey asked about the impact hybrid work could have on long-term demand for office space users. Most respondents said office tenants will need between 20% to 30% less space. The second-most common answer was 30% to 40% less space required. Just 3.1% said their firm would need more office space after moving to hybrid work.
Respondents also discussed the biggest challenge or disadvantage for an office occupier when most of its employees work remotely. More than one-third of respondents called the loss of cultural identity and cohesion the biggest disadvantage, followed by a negative impact on younger people who need development and coaching. Just under 5% of respondents said they expect no disadvantages.
Nearly half of respondents cited better work/life balance as the biggest advantage for an employer when most of their team works remotely. This benefit was followed by reduced occupancy costs for the business at 14.6% and easier employee recruitment at 13%. Just 2.3% said they see no advantages.
Looking ahead, most respondents said 10% to 20% of office leases will move from a traditional lease to a flex lease within the next five years. The second most common prediction was 20% to 30% of leases would become flex leases. Less than 7% of those surveyed said they think flex leases will account for more than half of office leases within the next five years.
