“Landlords have seen occupiers demanding, and expecting, better quality offices in recent years and if solutions can be achieved ahead of lease events, existing space can be just as desirable and efficient as a newly-developed office,” said Michael Taelman, CBRE Luxembourg’s country head, in a press statement. Photo: CBRE

“Landlords have seen occupiers demanding, and expecting, better quality offices in recent years and if solutions can be achieved ahead of lease events, existing space can be just as desirable and efficient as a newly-developed office,” said Michael Taelman, CBRE Luxembourg’s country head, in a press statement. Photo: CBRE

43% of employees in Europe are now working from the office three or more days a week, indicating a significant rise in office utilisation rates, says a report from the real estate services and investment firm CBRE.

Office attendance has seen a significant increase over the past year, according to CBRE’s 2024 European Office Occupier Survey. Based on responses from 120 companies across Europe, the study revealed that larger companies are at the forefront of this trend, driving higher levels of office space use.

Office utilisation rates

The survey showed that the proportion of companies reporting average building utilisation rates of 41% to 80% increased to 61% in 2024, up from 48% in 2023. This shift represents a substantial change in office attendance patterns compared to the previous year. Conversely, the proportion of companies experiencing lower utilisation rates decreased, with only a third reporting use rates of 40% or below, compared to nearly half of respondents in 2023.

Larger companies--defined as those with 5,000 employees or more--saw the highest levels of increased office attendance. Nearly two-thirds of these large enterprises reported utilisation rates of 41% or higher. This success was attributed to both natural momentum and the increased use of attendance mandates.

The frequency of office visits also saw an upward trend. The percentage of employees attending the office three or more days a week increased to 43%, up from 37% in 2023. This rise indicated that the improved use rates were primarily due to more frequent office visits by employees rather than a reduction in the overall portfolio size of companies, stated CBRE.

Office attendance rates

Smaller companies, despite operating at lower overall levels of utilisation, experienced improved rates of high-frequency attendance. Companies with fewer than 5,000 employees saw an 18% increase in employees going into the office four to five days a week. This trend was even more pronounced among companies with fewer than 1,000 employees, where 31% of employees fell into the four-to-five-day attendance category.

The implementation of office attendance mandates continued to grow, with 76% of companies having some form of attendance policy in place, noted CBRE. However, only 40% of these companies enforced a mandatory attendance policy, while 17% allowed individual teams to make their own decisions on office attendance, reflecting a flexible approach to mandate enforcement.

Future expectations

Richard Holberton, CBRE’s head of European office research, that the survey’s findings indicated a return to vibrancy for office spaces. He noted that while many companies considered current utilisation levels stable, 30% anticipated further increases. Holberton also highlighted the ongoing challenge of aligning employers’ expectations with those of their employees over the long term.

Despite the increased momentum in office attendance, further consolidation within office portfolios is expected. Just over half (57%) of companies planned to reduce their portfolio size over the next three years, a trend likely driven by larger companies carrying surplus space and the need to cut real estate costs, said CBRE.

The outlook for portfolio size is not uniform across all companies. 17% of companies intended to maintain their current portfolio size, and 24% planned to expand. Among those planning to expand, almost three-quarters (74%) cited anticipated business growth as the primary driver for this decision.

Leasing trends

Most companies looking to reduce their footprint planned to do so by allowing leases to expire. Nonetheless, 58% of respondents indicated that they were likely to renew existing leases if they remained fit for purpose. This trend was supported by landlords’ increasing willingness to negotiate and offer more flexible terms.

Michael Taelman, CBRE Luxembourg’s country head, said in a press statement on 8 August 2024 that occupiers had increasingly demanded better quality offices in recent years. He suggested that if landlords could address these demands ahead of lease events, existing office spaces could remain as desirable and efficient as newly developed ones. Taelman further noted that whichever approach occupiers chose, the office served multiple roles, including acting as a brand showroom, a tool to optimise productivity and a platform to reinforce company culture and collaboration.

CBRE Luxembourg has nearly 30 employees.

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