Big businesses in England and Wales have been squandering £10 billion a year on under-used office space, our pre-pandemic study shows.
Our 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 pre-pandemic was more than £4 billion annually, the report concludes, with large firms in other regions collectively squandering billions more.
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 necessarily expect a rush to smaller premises. Of course, it’s possible to take the data and decide to downsize and save money, but many businesses may 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.