Almost half of the companies that occupy large office spaces plan to relocate within the next three years, as many consider downsizing because of the increase in remote working.
The Covid-19 pandemic forced most businesses to implement remote working facilities as the population was instructed to “stay home” and while only 3% made the move a permanent one, a third are on the hunt for a smaller office space.
The findings are based on research carried out by law firm Gowling WLG and found that 95% of companies with more than 1,000 employees that rent an office space have the flexibility to move before 2024 due to expiring leases or break clauses within the next 36 months.
According to the report, A more flexible future: redefining the role of the office, which is based on 497 senior executive responses, the needs of employees are driving the decisions behind moving office space, with 48% requiring a better location for staff, and 38% stating that current facilities require an upgrade to meet staff needs.
The research also demonstrated a trend for a hybrid model, which allows employees to utilise both an office and working from home, among the respondents following the flexible working model that has been forced upon businesses over the past year.
For Gowling WLG, the results of the survey highlight an opportunity for investors and landlords to review their portfolios and proactively engage with their tenants.
Dan Gwilliam, real estate partner at Gowling WLG, said: "With many occupiers in a position to make changes in the short term, landlords and investors will need to navigate a wider set of considerations and commercial challenges if their portfolios are not to be left behind in the evolution of the office sector".
The law firm suggested landlords and investors look at the services office model as an alternative to the traditional rented space as 84% of those that responded to the survey considering these as a viable option going forwards.
Ion Fletcher, director of policy at the British Property Federation, said: "Despite the adoption of increased remote working, it is clear that for most businesses and organisations the office environment, albeit in a more flexible state, is crucial to facilitate new business and employee learning and development.
"But findings also show that office space providers will need to have more nuanced conversations with occupiers about their needs in order to remain competitive and that those conversations could happen sooner than people expect."