Half of firms look to cut office space after ‘sea change’

ALMOST half of businesses plan to cut down on office space in the coming years because of changes to the world of work sparked by the coronavirus crisis, new research has revealed.

With more employees working from home, companies will “remodel”

their estates, according to the risk management and insurance brokerage firm Gallagher.

The company’s survey of 1,000 business leaders indicated that the flexibility brought about by working from home is set to bring permanent changes to the workplace.

Nearly half of respondents said they will reduce office space by the end of 2025, while a further one in seven have already downsized since the start of the pandemic.

The research estimated that around 18 million square feet of office space will become redundant in the next five years – 18 per cent of all current square footage in use – having a “profound impact” on the way cities look.

The change is set to save businesses with office space an estimated £45,430 a year in rent, the report added, predicting the fiveday office working week is set to become a thing of the past.

Jon Phillips, of Gallagher UK Retail, said: “The restrictions on office-based working due to Covid-19 have made businesses rethink the space they need.

“Clearly many businesses will continue to need space for storage of equipment and the housing of IT. However, we are seeing a long-term sea change in terms of employee attendance five days a week.”

Meanwhile, the number of distillery businesses has increased by almost a third during the pandemic.

Accountants UHY Hacker Young said the total jumped from 272 in 2019 to 351 last year, probably fuelled by people using the lockdown as a springboard to start craft spirits businesses.