Big businesses in England and Wales are squandering £10 billion a year on under-used office space, our new study shows.
The report ‘Wasted Space: The colossal cost of under-used office real estate’ draws together data from our work with more than 100 corporations worldwide with figures from government and the property industry to put hard numbers on the issue for the first time.
In London alone, the cost of office space being under-utilised is more than £4 billion annually, the report concludes, with large firms in other regions collectively squandering billions more (see table).
Big employers with large office spaces are likely to benefit the most by addressing the issue and switching to flexible working strategies such as desk sharing. They can use Abintra’s workplace monitoring systems and our specialist consultancy expertise to typically find an extra 30 per cent or more of space.
However, we don’t expect the findings to stimulate a rush to smaller premises. Of course, it’s possible to take the data and decide to downsize and save money, but most businesses choose to use their newly-discovered space to enhance the workplace, for example by introducing new agile working areas, such as in-house coffee shops and informal meeting spaces. These have proven benefits for productivity as well as recruitment and retention, so being able to accommodate them without having to take on extra space is a huge advantage.
Clearly, information about the amount of space a business actually needs in a given location is critical for planning future real estate decisions. It can also be deployed by risk managers to ensure sufficient space is available to keep mission critical operations running if there is a disaster within a building or at another nearby company location.
The report reveals that large office-based firms with 250 or more employees in England and Wales are together spending £10,158 million on unnecessary total occupancy costs – that’s rent, rate and associated costs of running a workspace and related office functions.
What’s more, the issue is probably on an even bigger scale than the report’s conclusions, since our calculations are based on modest estimates of the amount of space saving possible and the number of people who work in offices.
The report is free to download at https://abintra-consulting.co.uk/wasted-office-space-report/
Under-used office space across the UK by region
|Estimated office floor space under used by large firms|
|Yorkshire and the Humber||10,250,677|
|East of England||11,191,012|
|England and Wales||131,047,469|
Estimated annual cost to large firms of under-used office space
|England and Wales||10,159|
|Yorkshire and the Humber||597|
|East of England||727|
- Businesses in the UK by industry in 2017: 5,695,000 (Business Statistics briefing paper, House of Commons Reading Library Briefing Paper Number 06152, 28 December 2017) file:///C:/Users/duncan.HPR/Downloads/SN06152.pdf
- Total office cost survey (Lambert Smith Hampton) http://www.lsh.co.uk/commercial-property-news/2017/june/lambert-smith-hampton-publishes-total-office-cost-survey-2017
- Office rents map (Colliers) http://www.colliers.com/en-gb/uk/insights/offices-rents-map
- Summary statistics for office premises, Government Office Regions gov.uk/government/uploads/system/uploads/attachment…/1179490.xls
- How much office space am I entitled to? (HSE) http://www.hse.gov.uk/contact/faqs/roomspace.htm
- Office pace calculator (Zoopla) https://www.zoopla.co.uk/commercial/space-calculator/
- Average office square footage per person (Mehigan) https://mehiganco.com/?p=684
- Census and employment data (ONS)
Abintra is the pioneer in technology-led corporate office space evaluation and management.
Based on award-winning technology, Abintra’s consultancy services give unprecedented precision and real-time reporting about how office space is being used. That illuminates the ways organisations could be using their real estate more effectively, not only for cost efficiency but also for creating better, more flexible work spaces that contribute to recruitment and retention.