Covid-19 transformed business models overnight. With 90 percent of the employees working from home, companies have been forced to rapidly change their organizational structures and workflow models. According to PwC data, 74 percent of companies plan to expand the scope of remote work after the pandemic. With the end of the lockdown this appears to have become the new normal.
Predicting the upcoming recession, companies need to reduce costs and reserve cash for their core business. With long term office lease contracts, some companies have decided to put surplus space on the market as a sublease. Colliers International research published in July indicates that there is already a noticeable increase in the number of sublet space offered. Experts are estimating this segment will grow significantly in the next few months.
Many of the those companies that are looking for office space, need to avoid long term obligations. Regarding workplace changes they perceive any relocation only in perspective of potential savings and flexibility. Experts agree that flexible or hybrid solutions are the future and the pandemic is just accelerating this process. According to Mark Dixon, this segment will take up to 70 percent of all new leases getting signed in the foreseeable future.
“The lockdown proved that we can work remotely from home and other places and companies now will adjust rotation models where only 30-50 percent of the work forces are coming back into the office and as a result the surplus space is obsolete and is offered as sublease,” Hubert Abt, New Work founder and CEO, said.
“We estimate that up to 20 percent of the current occupied space will come to the sublease market. Combined, all the social and economic factors, with the recession coming, companies have now a moment to rethink and redesign their office needs. Some have to cut costs by giving up their space whilst others who are lucky to develop businesses – can now expand. With flex offices and serviced sublease offers we have solutions for both,” Abt underlined.