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Asia Pacific companies lead the return to office: CBRE

July 4, 2023 9:46 AM SGT

Office utilisation rates in Asia Pacific have reached 65%, compared to 50% in the US and Europe (Picture: Samuel Isaac Chua/The Edge Singapore)

SINGAPORE (EDGEPROP) - A new survey by CBRE has found that companies in the Asia Pacific (Apac) are leading the way in the return to the office, with office utilisation rates in the region reaching 65% as of March this year. In comparison, the US and Europe registered a utilisation rate of 50%. The survey from March to May polled over 130 corporate real estate executives in Apac from over 80 companies.

Nearly half (48%) of respondents surveyed prioritise getting employees back in the office, compared to 40% for the US and 43% for Europe. “Corporate management in Apac is focusing on getting employees back to the office as they retain a strong belief that office-based work can boost collaboration and engagement,” the report adds.

Average office utilisation rate by market as of March 2023

office utilisation rate - EDGEPROP SINGAPORE

Office attendance varies across the region, with CBRE highlighting that markets in Greater China, Korea and Japan show utilisation rates of around 70%, whereas office utilisation remains below 60% in the Pacific.

Hybrid working remains part of the new normal, though companies appear to be shifting towards employees spending more days in the office. The survey shows that 34% of companies surveyed in 2023 require employees to be in the office full-time, declining from 38% last year. However, there has also been a reduction in companies allowing an equal split between working from home and in the office, going from 28% in 2022 to 22% this year.

Company goals for steady-state office utilisation

More companies intend to have staff mostly based at the office (three or more days per week), with 32% of companies surveyed in 2023 looking to do so, compared to 24% in 2022. CBRE believes that some level of flexibility is here to stay, anticipating that office attendance in Apac will stay 10% to 15% below pre-pandemic levels for the foreseeable future.

While leasing strategies are expected to remain cautious in the short term amid ongoing economic uncertainty, CBRE says that 44% of Apac companies surveyed plan to increase their office portfolios over the next three years, indicating a strong expansionary appetite. Of these companies, most are looking to boost their portfolio by 10% to 30%.

As for office space preferences, 64% of survey respondents wanted to occupy offices in buildings certified for environmental, social and governance (ESG), while 52% intended to allocate more of their portfolio to flexible space. Flexible space remains a way to enhance portfolio agility, with companies expecting flex space to represent a quarter of their overall real estate portfolio by 2025, up from about 14% currently,” says CBRE’s head of occupier research Ada Choi.

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