The UK’s biggest employers plan to reduce their office footprint by up to 9m sq ft, according to research – a vast amount of space equivalent to 14 Walkie-Talkie buildings.
A survey of 258 of the country’s biggest companies found that more than half expect to reduce the size of their real estate portfolio. Of these, one-third believe they will reduce their office footprint by more than 30%.
The PwC poll indicates that there is likely to be a sizeable fall in occupied office space across the country. This will come as a blow to landlords who are hoping their biggest corporate tenants will retain their existing space beyond the pandemic.
The findings come as office workers gradually head back to the workplace ahead of planned further lockdown easing later this month. On 18 May, offices were half-full across the UK for the first time since the pandemic started.
The poll also suggests that financial services firms are most likely to drop space, with 60% of those respondents saying they will reduce their footprint. Six in 10 of them expect it to reduce by between 21% and 40%. Meanwhile, 57% of public sector organisations said they will reduce their office footprint, compared with just 28% of those working in consumer markets.
Angus Johnson, UK real estate leader at PwC, said: “The figures couldn’t be more clear – the shift to hybrid working, with part of your time at home and part in the office, is pretty much embedded into the working culture of many organisations. So much so that a significant proportion of the businesses we spoke to are planning to reduce their office portfolio, which could lead to up to 9m sq ft of vacant space.
“However, it is clear that the role of the office is not going to disappear. We may see an increased demand for flexible space as many businesses operating models may well need that option if holding dead space is to be avoided. It is also clear that the nature and purpose of office space is going to change.”
The figures come after a separate poll by Survation found that just 17% of respondents plan to work from home permanently after the pandemic. Far more people – 81% of those surveyed – wish to work in an office, while 51% want a mixture of remote and in-person office work.
The government has assembled a task force that is expected to issue guidance in the coming weeks on how to extend flexible working, potentially ensuring that people who have transitioned to a hybrid of home and office working will be able to maintain that pattern.
The task force is also considering whether employment contracts need to change to enable more ad hoc, hybrid working in different locations.
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