Home working effect
Third of firms to talk with landlords over office space
Many offices are empty as staff work from home
More than a third of firms plan talks with their landlords to review their office requirements following the widespread success of home working.
New research from the CBI reveals that 37% of firms are conducting, or planning to conduct, conversations with landlords or managing agents to review their office space needs.
A quarter (26%) now see half or less of their office space as essential while two-thirds (65%) regard at least 20% of their office space as non-essential.
The figures will add to concerns in the property sector that demand will shrink, with a corresponding fall in rentals to lure businesses back into the market. However, if it prompts a slowdown in building activity this would provide some stability to rental values.
Pre-Covid trends in Scotland have indicated that demand in Edinburgh and Glasgow outstrip supply but activity in the second quarter was described by CBRE as non-existent. There are some signs of a pick up in Q3, but uncertainty around the economy is weighing on investor decisions.
The London market is also nervous about the a fall in demand for offices, with Canary Wharf Group ordering its staff back to the near-deserted financial centre.
The Bank of England has become concerned at the low level of activity in the City, while banks have seen an opportunity to cut costs.
HSBC said just 20% of its 10,000 London staff will return to their offices next month. Natwest/RBS was unable to provide figures. TSB told Daily Business that the majority of its office-based employees (c.3,500) are working from home and it is consulting with them on how best to return to offices.