Most German Companies Holding On to Office Space Even with Remote Working

These recent average figures conceal considerable differences. In the service sector, the share of downsizers is 11.9%; in manufacturing, it is 8.1%. Industries where particularly large numbers of companies are planning to downsize their offices because of remote working include automotive (37.5%), clothing manufacturing (18.6%), broadcasting (40.3%), IT (21.0%), information services (28.4%), and advertising and market research (34.8%). In trade (3.7%) and construction (1.9%), only a few businesses intend to reduce their office space.  Plans for downsizing are most prevalent in industries that make intensive use of working from home. In contrast, only 1% of all companies plan to increase their office space in response to the new way of working.

For more than a year, the ifo Institute has recorded a constant remote working proportion of one-quarter of employees. “Post-pandemic, one thing is clear: working from home is here to stay. When employees work partly on-site and partly at home, the demands on offices change,” Krause says. Many companies have already reacted by adapting their offices to the new working models, he says, for example by introducing desk sharing and creating more spaces for face-to-face interaction on days spent in the office. Since the survey did not address such changes that have already taken place, the actual effect is probably even greater. “Other companies plan to adjust in the coming years upon expiry of their office leases, most of which are long-term. This development will exacerbate the crisis in the real estate market, which is already under pressure due to higher interest rates and construction costs.”