Based on Ifo's findings, there's a noticeable decrease in office space in German businesses due to remote work.
German businesses, as per an Ifo study, are trimming down their office spaces due to increased reliance on remote work. "Approximately 6.2% of companies have already diminished their office space, and another 8.3% intend to do so within the next five years," pointed out Ifo analyst Simon Krause. It's primarily the companies that occupy a substantial portion of office space that are now scaling down.
Leading corporations and service providers dominate the office space consumption in Germany, according to the data. Approximately 25% of companies in these sectors have already reduced or are planning to reduce their footprint. "Based on our findings, we anticipate a long-term decrease in office space demand by around 12% due to remote work," explained Krause.
"Despite some firms pushing for a return to traditional offices, remote work has become a regular practice," Krause noted. The remote work percentage has remained relatively constant for almost two years: about 25% of employees work remotely at least occasionally, and around a third of companies offer this option.
The impact on office space is only starting to materialize due to the long-term nature of rental agreements, as outlined by the Munich institute. This shift poses another challenge for the real estate sector.
The Munich institute highlighted that the impact on office space is just beginning due to long-term rental agreements, as many leading corporations and service providers, who are major office space consumers, are reducing their footprint. Therefore, The Commission may need to consider the potential impacts of this trend on economic activity and workplace dynamics.
