USA: Office? No, thank you!
In the United States, there is a clear trend towards hybrid work, which is changing the world of work forever. The office occupancy rate currently fluctuates between 40% and 60% of pre-pandemic levels, according to a study by the Wall Street Journal in 2023. This suggests that many employees will continue to work from home and that the return to the office will only be partial.
A study by McKinsey from 2022 confirms this trend: 58% of employees have the option of working remotely for at least part of the week or even the entire week. This development has a significant impact on the real estate market. According to an analysis by the Boston Consulting Group from 2023, around 35% to 40% of existing office space will no longer be needed in the next three years. This could lead to a significant reduction in office space and a conversion of office buildings.
This change is also noticeable in the retail sector. In San Francisco, the proportion of vacant stores rose from 4.5 % to 8.2 % between 2020 and 2022, as reported by Forbes 2023. At the same time, other neighbourhoods are experiencing a renaissance: sales in bars and restaurants in Brooklyn now exceed those in downtown Manhattan, according to a 2023 New York Times report. This could indicate that workers and consumers are increasingly staying in residential areas and frequenting them more.
Europe: back to the office
In contrast to the USA, European countries are trending more towards a return to the office. The office occupancy rate in Europe reached around 70 to 90% of pre-pandemic levels in 2023, according to the Wall Street Journal. This shows that many European workers are returning to the office on a regular basis.
In London, for example, 52% of companies are expanding their office space, while only 22% are downsizing, according to a study by Savills in 2023. This suggests that many companies in the UK capital continue to rely on physical workspaces.
However, the flexibility of working models varies greatly across Europe. In France, according to a study by ADP in 2023, only 18% of employees can work wherever they want. The number of companies offering exclusively remote work has fallen by 35% in the last year, Laborability 2022 reports.
The situation is similar in Italy: Only 25% of the eight million potential “smart workers” work from home at least one day a week, as Rai News 2022 reports. This shows that the concept of remote working is not yet as well established in some European countries as it is in the USA.
To summarise; developments in hybrid work differ significantly between the US and Europe. While flexibility and working from home have increased significantly in the US, many employees in Europe are returning to the office. These differences have far-reaching implications for real estate markets, urban infrastructure and the economy as a whole. It remains to be seen how these trends will develop in the coming years.
