Commercial Real Estate News
Employees Return to Office Trend Growing in Asia Pacific Markets
According to a new survey by CBRE, employees in Asia Pacific are leading the way in the return to the office, with office utilization rates in the region reaching 65%, compared to 50% in the U.S. and Europe.
The survey found that nearly half (48%) of companies are prioritizing efforts to bring their employees back into the office amid economic uncertainty.
Although hybrid working remains the new normal in Asia Pacific, 44% of companies plan to increase their office portfolios over the next three years, indicating a strong improvement in expansionary appetite. This is contrary to the belief that the pandemic and remote work adoption led to companies to reduce office space. In fact, 37% of Asia Pacific companies expanded their office portfolio over the past three years, while only 25% downsized. The resilience is mainly due to organic business growth and the economic recovery in the medium term.
The survey also found that office attendance varies across Asia Pacific by geography and sector. Markets in Greater China, Korea and Japan show higher levels of office-based working with utilization rates at approximately 70%. In contrast, hybrid working is more prevalent in the Pacific, where office utilization rates remain below 60%. Business services and financial services firms report relatively higher office usage. Notably, tech companies based in Asia reported over 60% utilization rates, contrary to the perception of lagging return-to-office rates among Western tech firms.
The survey found that 66% of companies acknowledge direct performance and financial consequences for employees not adhering to return-to-office policies. In terms of office seating arrangements, 48% of companies have implemented flexible seating in 2023, which is expected to grow 80% by 2025.
"We see employees attaching greater importance to their work environment compared to before the pandemic," said Luke Moffat, Regional Managing Director and Head of Advisory & Transaction Services, Asia Pacific for CBRE. "In the face of more companies seeking higher quality office space and futureproof buildings which combine leading-edge physical human and digital elements to improve work efficiency and enhance the employee experience, there is also increasing demand for flex space as many occupiers are looking for shorter lease terms. We encourage landlords to adopt a proactive approach to the flight-to-quality trend and consider proactive measures that can enhance their properties' appeal to tenants."
A strong interest in Environmental, Social and Governance (ESG) certificated buildings was expressed by 64% of the companies surveyed.
"Corporate real estate portfolio management will increasingly emphasize green buildings and flexible office space," said Ada Choi, Head of Occupier Research, Asia Pacific, for CBRE. "Companies show a strong desire to expand into ESG-certificated buildings. Simultaneously, flexible space remains a way to enhance portfolio agility, with companies expecting flex space to represent a quarter of their overall real estate portfolio by 2025, up from about 14% currently."
