UK businesses are more than four times more likely to be looking to expand their office space in the next 12 to 18 months than reduce it, according to a new survey commissioned by law firm Irwin Mitchell.
The survey found that five years on from the start of the Covid pandemic, 45% of businesses are looking to expand their office footprint compared with 10% that are looking to reduce it, with 64% of respondents admitting they downsized more than necessary during the pandemic.
Of the businesses planning to expand, 49% said they would consider reconfiguring their existing premises rather than relocating to entirely new sites (23%) while 44% said they would consider incorporating flexible workspace into their property portfolios.
Over the past year, 72% of employers have noted an increase in office attendance, with 74% predicting further growth in the next 12 to 18 months. This trend is particularly pronounced in London, where 81% of businesses expect higher in-office numbers, and in the North West, where 71% forecast a similar rise.
However, only 33.5% of respondents believe their existing space can handle full capacity, with 53% stating that if everyone returned to the office, they would struggle to accommodate everyone.
Will Scott, real estates disputes partner at Irwin Mitchell, said: “Our survey shows that the office and its place in the world of work continues to evolve, particularly as working patterns change. As rising costs and inflation impact corporate decision making and in line with the need to reduce unnecessary expenditure, businesses appreciate they need to improve the productivity of their current office space so that it can both accommodate increasing numbers of staff coming back in to work, but also one that can satisfy internal stakeholders’ needs and wishes.
“Environmental considerations play a part in this, but attitudes continue to shift away from the ‘nice to have’ towards that ‘what is necessary’ as the costs and associated benefits become clearer to see. Businesses are leaning towards more environmentally focused premises that help to drive down operational costs, whilst also supporting the demands of employees and those they do business with, whist enabling the company to avail itself of greater financing options.
“In the ‘stay versus go’ decision, and in tight office market supply conditions, more businesses are now considering what is probably the least expensive option for expansion – to work closely with their current landlord to rework their existing office property and possibly add in an element of flex space as and when needed, giving themselves a breathing space to think about where they want to be more permanently.”
