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Sign in Sign up for a FREE subscriptionStructural trends are bifurcating global office markets
The bifurcation of the office sector will be a dominant trend in the coming years. It manifests between markets and within markets.
Four key examples are: Divergence caused by pandemic-induced net absorption trends (at regional and city level); prime and secondary offices diverge across submarkets (in vacancy rates, rent and valuation growth); distinct cultural differences in hybrid working and impact on long-term occupier demand; the problem of older buildings and the “green premium”.
The disruptive threat posed by pandemic-induced hybrid working has passed peak risk to office market occupier demand, with cultural differences likely influencing long-term impact.
In the United States and Europe, landlords recognise that hybrid working is likely to be a permanent feature of working life, and the office must compete with the “home” as a work location. It is a contest we expect landlords that offer a best-in-class workspace with exceptional amenities to win