Businesses blow billions on wasted office space

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.

Download the report free

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
Region sq ft
North East 5,126,630
North West 15,226,182
Yorkshire and the Humber 10,250,677
East Midlands 7,208,799
West Midlands 10,497,386
East of England 11,191,012
London 36,665,288
South East 20,365,729
South West 9,491,176
England 126,023
Wales 5,024,589
England and Wales 131,047,469
 

Estimated annual cost to large firms of under-used office space

Region £ million
England and Wales 10,159
North East 313
North West 960
Yorkshire and the Humber 597
East Midlands 399
West Midlands 692
East of England 727
London 4,202
South East 1,323
South West 634
England 9,847
Wales 312

 

Sources

About Abintra

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.