Photo: imago images/photothekMore and more employees prefer the “home office” model if their own space at home allows it
Working model
The effects are not only felt by the real estate market, as more and more commercial spaces are standing empty – canteens are also fighting for survival
In recent months, there have been repeated reports of companies increasingly requiring their employees to be present in their own four office walls. However, these were probably only exceptions, as a survey by the ifo Institute shows.
Three out of four of the companies that allow home office work want to keep it unchanged. This is made clear by the ifo Institute survey. “These results refute the view that the trend is going back to the office,” explains ifo researcher Jean-Victor Alipour. Only twelve percent are planning stricter regulations and only four percent want to abolish working from home completely. “Public reporting focuses on individual companies where home office is to be scaled back. This exaggerates the actual development,” says Alipour.
Reduced office capacity
Eleven percent of companies want to make the regulations even more flexible. “It is undisputed that on-site work is superior to home office in some aspects. Stricter rules through greater coordination of shared presence times can make home office more productive overall,” explained Alipour. 13 percent of service providers and eight percent of industrial companies are therefore planning more flexible home office regulations. “Home office is and will remain firmly anchored in Germany. The clocks are not turning back to 2019,” said the Ifo researcher. In contrast to other industrial nations such as the USA or Asia, working from home was long frowned upon in Germany. It was only during the Corona pandemic that it became a working model in Germany. The trend towards home office has led large companies in particular to draw organizational consequences. According to surveys, around a third of large corporations have already reduced their office capacity.
The home office is therefore reducing the need for office space in Germany, primarily in the big cities. The real estate consultant Colliers, together with the ifo Institute, analyzed the situation in the big cities of Berlin, Hamburg, Munich, Cologne, Frankfurt am Main, Stuttgart and Düsseldorf. Regular home office work has become the norm for many. “This is leading to a decline in demand for offices, especially in large companies and in sectors with high home office usage,” the analysis says. Twelve percent less space will probably be sought by 2030. This would correspond to a reduction in demand of around 11.5 million square meters of office space in the seven big cities.
Vacant offices
“The new world of work is triggering a structural change in the office market,” said ifo researcher Simon Krause. Accordingly, sales on the office rental market in 2023 fell to the level of the acute Corona crisis. The office market in Germany has traditionally been closely linked to the ifo business climate index, the authors explain. The vacancy rate of less than three percent in 2019 rose to over six percent last year. Office rental contracts in Germany have an average term of around seven years, which is why the after-effects of the pandemic are only becoming apparent with a delay. In any case, the number of offices vacant due to home office work has tripled. The hopes of some politicians that the vacant office buildings could be converted into living space are proving to be deceptive. There are only limited options, the analysis says.
Shift to the suburbs
However, the trend towards working from home has also plunged institutions that for many years formed the “soul” of a company into a deep crisis. Empty seats are now part of everyday life in many company canteens. Some are restricting operations. There are currently no precise surveys on how working from home is affecting catering in companies and in large cities. The insurance group Allianz, for example, has had an interesting experience: “Many employees are meeting up for lunch again,” Allianz reports. This is also a consequence of the Corona restrictions. Like Allianz, other companies also want to make their locations more attractive again so that employees can spend more time on site and exchange ideas.
However, it will be interesting to observe how the city centers develop. The Ifo Institute has already concluded that part of the retail sales have shifted from the centers to the outskirts and suburbs – precisely where people working from home generally live.
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