End of work from home boom creates rush for office space

EMPLOYERS are racing to find new offices in central London as take-up of space rebounds to pre-pandemic levels, in the clearest sign yet that the remote working boom is running out of steam.

New figures compiled by commercial real estate services firm CBRE show that companies signed deals for 12.7m sq ft of office property in central London in the 12 months to the end of June – up 153pc on the same period last year, and 5pc above the 10-year average.

In the West End – an area CBRE said had experienced “one of the swiftest recoveries across the major European office markets” – take-up of office properties was up 24pc on the 10-year average. Banks and finance companies are among the most active in looking for sites in the area, CBRE said, with the sector taking 1.4m sq ft out of the total 4.9m sq ft leased in the 12-month period. CBRE said this was the highest level it had ever recorded for the industry.

Simon Brown, CBRE head of office research, said: “This surge in demand shows us the true depth of the central London office market. Despite an increase in hybrid working, demand for office space remains robust. The received wisdom is that hybrid working will significantly impact office demand. This data clearly challenges that narrative.”

More workers have started to return to offices after dragging their feet since restrictions were lifted last year. The latest Pret Index, which details transactions in Pret a Manger cafés, suggested footfall in the City of London hit 83pc of pre-pandemic levels last month.

The cost of living crisis is poised to prompt a fresh uptick in staff coming

‘The received wisdom is that hybrid working will impact office demand. This data clearly challenges that’

into workplaces to avoid higher energy bills. Those working from home will be spending hundreds of pounds extra on their energy bills, according to figures from Uswitch earlier this month.

Experts have predicted more staff will also start returning to offices when the economy goes into reverse, as predicted to happen later this year by the Bank of England.

Anthony Painter, director of policy at the Chartered Management Institute, said earlier this month that “people are increasingly going to feel that their jobs may be insecure, and this will more than likely shift behaviours and lead to a return to presenteeism”.