- Businesses are reducing their office square footage.
Work-from-home trend decreases need for traditional office spaces. As per the Ifo Institute, about 6% of businesses have already decreased their office space, with a further 8% planning to do so within the next 5 years. Ifo analyst Simon Krause predicts a long-term reduction of demand by roughly 12%.
The proportion of Germans working from home has been at 25% since 2022. "Even though some companies insist on a return to the office, regular work-from-home has become the norm. consequently, companies are gradually adjusting their office space requirements," says Krause. "This trend is prominent among service providers and large corporations, which make up the majority of office space consumers." However, the shift is being slowed down due to ongoing lease agreements.
With the increasing acceptance of remote work, some real estate companies are now focusing on virtual property tours to attract potential buyers or renters. The decrease in demand for traditional office spaces due to the work-from-home trend also means that there's a growing interest in converting these spaces into residential or retail properties.
