Empty Offices Could Cost London Businesses Almost £13bn

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17 November 2020

Unused office space after coronavirus could prove costly for companies, as research predicts over 70 per cent of all office rent paid by businesses in London will be spent on empty desks.

London office workers want to spend an average of 2.7 days back in the office once all COVID-19 restrictions have been lifted, on the basis they had the resources to work from home comfortably.

One in ten workers (11 per cent) said didn’t want to go back to the office at all. 

The office rental research from commercial real estate information company, Costar, along with pre-COVID-19 utilisation rates provided by The British Council for Offices (BCO), shows that a combination of factors could be about to lead to a shift in the way that the commercial property sector functions.

72 Per Cent of All Office Rent Paid by Businesses in London Would be Spent on Empty Desks 

In a report compiled by Space Three Two, a new office timeshare marketplace born out of lockdown, the total London commercial rental market is worth an approximate £17.9 billion. Prior to coronavirus, office workers spent an average of 4.2 days a week in the office. 

If this drops to an average of 2.7 days after coronavirus, the utilisation rate per office (e.g. the percentage of time that desks in any given office is in use), would drop from 44 per cent pre-COVID to 28 per cent post-COVID. 

Insights from the report show London offices are only using desks 28 per cent of the time, equating to a 72 per cent rate of wastage. As a result, unused desks could cost businesses £12.84 billion in total. This means 72 per cent of all office rent paid by businesses in London would be spent on empty desks. 

“Timesharing your office for two or three days a week with another like-minded business of similar shape and size, will not only save on costs but dramatically reduce energy consumption and time spent commuting, permanently."

– Jon Dweck

CEO and Founder, Space Three Two

UK’s First Office Timeshare Agreement

Today’s figures come as Space Three Two announces the signature of the first-ever office timeshare agreement between Pod Talent and The Hive, both independent recruitment businesses based in London.

The Hive will move into Pod’s existing office in Old Street for two days each week whilst Pod retain the three remaining days. Pod will reduce their office costs by 40 per cent, while The Hive will reduce their office costs by 60 per cent with no need for a fit-out. Energy consumption is also estimated to reduce by 35-40 per cent between the two companies.

Jon Dweck, CEO and founder of Space Three Two, commented: “Signing the UK’s first office timeshare agreement is a significant step in the future of workplaces. COVID-19 has made a long-lasting change on the way we work and we know that after lockdown, and once social distancing has ended, the majority of businesses don’t want to return to the office five days a week as before.

“But empty offices are an expensive problem for businesses. For every business tied into a long-lease that they cannot get out of, there is a business able to seek a new part-time office.  Connecting them together is the ideal solution and a sign of things to come.

“Timesharing your office for two or three days a week with another like-minded business of similar shape and size, will not only save on costs but dramatically reduce energy consumption and time spent commuting, permanently. Both businesses have a space to call their own on the days they need it, generating substantial savings without rotating staff. It’s a win-win for everyone involved and we expect to see many more businesses looking to this approach after lockdown.”

Workplace Change – Have Your Say

The workplaces that we left in early 2020 are no more, but there are many factors that drive successful workplace change. We are now witnessing relatively successful home working arrangements, the wide adoption of collaboration technologies and staff wellbeing is top of the agenda.

This Workplace 2021 Survey, conducted by ThisWeekinFM and NFS Technology, seeks to identify some of these important drivers for change, how businesses are planning to implement structural change in their future workplace, as well as gaining a better understanding of the “how” question – the role of technology and the leadership of workplace change.

We will be sharing our findings in a report, due to be published in January 2021.

To thank you for your contribution, we will be entering all participants into a draw in December and the winner will be sent £250 of Amazon Vouchers (or equivalent in local currency).

This is your chance to contribute to valuable research in the facilities and workplace management sector, and to help shape workplace change for 2021.

COMPLETE  THE  SHORT  SURVEY  HERE

Picture: a photograph showing an empty office, with desks, chairs and computers all left unused

Article written by Ella Tansley | Published 17 November 2020

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