Simon Krause

Working from home reduces the need for office space in Germany. This is the result of a new study conducted by the ifo Institute together with real estate consultancy Colliers for the major cities of Berlin, Hamburg, Munich, Cologne, Frankfurt am Main, Stuttgart, and Düsseldorf. “Regular working from home has become the new normal for around 25% of employees and 69% of companies. This is leading to a decline in demand for office space, particularly among large companies and in industries where working from home is more commonplace. By 2030, it’s likely that the need for office space will have decreased by 12%. This would correspond to a drop in demand of around 11.5 million square meters in the seven major cities. The new world of work is triggering structural change in the office market,” says ifo researcher Simon Krause, coauthor of the study.

In Germany, the days on which working from home is most prevalent are Friday and Monday, finds a recent ifo Institute survey. “Friday is the most common day for working from home in 55% of companies, ahead of Monday at 35%. By contrast, Tuesdays, Wednesdays, and Thursdays are usually office days, also for employees who work from home some of the time,” says ifo researcher Simon Krause. This pattern can be seen in all sectors of the economy and across small, medium-sized, and large companies, albeit to different degrees. “Especially on Fridays, many offices are empty in companies with a large proportion of people working from home,” he adds.

Most companies in Germany, 84%, want to keep their current rules on working from home, finds an ifo Institute survey. “This applies to all sectors of the economy and to small, medium-sized, and large companies alike,” says ifo researcher Simon Krause. Only 8% of companies would like to change their rules on working from home. “Despite the public debate about returning to the office, working from home has become firmly established in the working world,” Krause adds.

Most companies in Germany don’t want to downsize their offices despite allowing employees to work from home. “The overwhelming majority of companies are leaving their office space as is. Only 9.1% of all companies plan to downsize their offices because of remote working. In individual industries, however, the figure is significantly higher – up to 40% in some cases,” says ifo expert Simon Krause. “So working from home is leading to a slight decline in demand for office space, putting pressure on the real estate market.”

Sales at eating places in major German cities have recovered, despite many crises in recent years. In the five metropolitan regions considered, sales at eating places are currently well above pre-Covid pandemic levels, even if adjusted for inflation. This is the result of a new study by the ifo Institute and the Technical University of Munich for the metropolitan areas of Berlin, Hamburg, Munich, Stuttgart, and Dresden. “There is an upswing in the food service industry after the Covid pandemic, despite the war in Ukraine and high inflation,” says ifo expert Simon Krause, co-author of the study. “The importance of eating places for many people is reflected in the fact that many restaurants in large cities are once again well attended.”

Remote working is leaving many German offices empty, finds a recent ifo Institute survey. “Currently, 12.3 percent of all on-site workstations are underused on an average day because of remote working. Before the pandemic, in 2019, the figure was only 4.6 percent,” says ifo expert Simon Krause. “In other words, the percentage of unused workstations in offices has roughly tripled.”