This article is from the Australian Property Journal archive
COMPANIES need to address the US$400 billion of waste expected to occur in commercial real estate in 2023, due to office underutilisation, as a new report shows over a one-third of office desks are sitting empty every week.
Office space globally was used just 30% of the time in the second quarter of 2023, this is just three percentage points more than during the first three months of the year – in what the report authors say could represent a “new normal”.
The latest Workplace Utilization Index (WUI) from XY Sense, an actionable occupancy intelligence platform for corporate real estate teams, showed the office occupancy and utilization rate was highest in United Kingdom, at 52%, while rates in the United States were lowest, at just 20%. Rates in the Asia-Pacific came in at 35%.
“While individual companies may see increases in office attendance and utilization, it’s clear that most businesses won’t see a return to pre-pandemic office utilization levels in the foreseeable future,” said XY Sense head of customer success Shivaun Ryan, who authored the report.
“This stabilization should provide a degree of comfort when planning changes to office portfolios. We’ve reached a new normal. The question is how workplace leaders are going to adapt their office portfolios to meet this new status quo.”
The report also showed changes in workers’ activities while in the office. There was a significantly higher utilization rate for collaboration spaces in the March quarter, at 24%, compared to the workplace utilization rate for individual workpoints, at 18%. That changed in the June quarter as the workpoint utilization rate increased by 67%. Ryan said this indicates that workers are performing a more balanced blend of individual and group work than at the beginning of the return-to-office movement, when workers spent more in-office time in group discussions and meetings.
Alex Birch, co-founder and CEO of XY Sense, said the findings compound the need for companies to address the “incredible” amount of waste occurring in commercial real estate.
“With global annual expenditure on office buildings at US$583 billion-plus and office utilisation remaining steady at about 30%, we’re on track to waste potentially US$400 billion in 2023 alone.
“Additionally, utilities and other services for unused space create billions of tons of unnecessary carbon. Understanding how your office space is really being used is the first step in reversing this wastage and creating high-engagement, high-performance workplaces.”
