The bifurcation of the office sector has never been as clear as it is today. And the gap between top-class and average office properties continues to grow.

As Nick Waring, development director at PineBridge Benson Elliot in the United Kingdom puts it, the European office market has been “cleaved in two”.

Hybrid work patterns, accelerated sustainability goals, higher inflation and interest rates have raised the hurdle for what constitutes a successful property. As a consequence, hard decisions will have to be taken on what to do with large swathes of the office market, which face an increasingly unsure future. “In response to flexible working trends and a desire to meet sustainability criteria, many corporate tenants are actively seeking smaller, better designed offices that are as much a destination for employees and visitors as they are a workspace,” says Waring. “Offices of this kind are in short supply, vacancies are low, rents are rising, and next-five-ye