Companies that have shrunk after Covid are now having a hard time finding office space
Businesses that cut offices during the pandemic are now scrambling to find bigger places as the trend to get back to offices is trending toward rhythm, but the main space is in short supply.
After years of assumptions, hybrid work will permanently narrow their demand for tables, and bosses increasingly bring employees back regularly. The result is a surge in demand for larger, modern offices, which has put many companies in a dilemma.
A national consulting director admitted that he misjudged the future of work life: “In lockdown, I had to study the crystal ball and predict how we work in the future and got it wrong.”
Regional Real Estate Investment Trust CEO Stephen Inglis, who owns an office in the UK outside of London, said even the corporate giants found themselves compressed. He suggested that the Big Four accounting firm Deloitte is one of those who cut too far.
“They may have shrunk too much size like some banks, and now have some of the largest office requirements on the market,” Ingris said. “Most businesses want to be in the best space. But we’ve run out. Regional cities have almost no room for ‘Prime’.”
When developers are reluctant to speculate on the future of the office market, the shortage is the result of a freeze in the pandemic era. Coupled with today’s “quality flight” (companies) prioritize new, environmentally friendly buildings to attract staff to rejoin – the supply has surpassed.
As a result, companies increasingly settled for renovated secondary offices. “We spent more money on renovating our portfolio,” Ingris said. “Even with some of the buildings we identified for sale, we took the tenant approach. It tells me the strength of the market.”
This shift highlights how the narrative around working from home changes. Once called the new normal job, employers who have been seeking collaboration, cultural and productivity-enhancing have gradually expanded their homework. But for companies with smaller footprints, it can be expensive to compete for larger offices now – especially as major spaces become scarce and rents rise.
