2023 targets have already been exceeded

The advent of remote work and its consolidation in subsequent years has put the office leasing real estate sector in serious trouble. The introduction of hybrid work models has given the industry some oxygen and allowed it to stay afloat.

The tightening of companies’ return to office policies is leading to a recovery in demand for more office space, which has already led to notable figures in cities such as Madrid and Barcelona.

Return to the office: an expected twist. 2024 marked a turning point in the return to office policy. KPMG’s CEO Outlook 2024 report, based on a survey of 1,300 CEOs around the world, found that 79% of executives expect to return to the office in 2024, compared with 34% who thought it would happen in 2023.

Tightening the return to office policies of major corporations such as Amazon, IBM, Goldman Sachs, JPMorgan, Salesforce or consulting firm PwC has given a boost to the office leasing sector, reviving its activity in the second half of 2024.

Immediate implications for the real estate market. The office market in Madrid began to show its first signs of growth in the first quarter of 2024, when 145,000 square meters were contracted. The increase in demand was even more pronounced in Barcelona, ​​where office rentals rose 52.5% year-on-year in the third quarter, according to Forcadell.

Offices have adapted. While the trend of returning to offices appears to have accelerated in the second half of the year, hybrid days remain the predominant option in the business mix. This has created demand for more flexible office space as employees are not always in the same space at the same time.

In the first six months of 2024, property conversions into flexible office space reached levels comparable to 2023 levels, according to a report from property consultancy CBRE. Madrid is a city where the majority of office space has been converted from exclusive company use to flexible space used as coworking or co-living, accounting for 57% of the total. They are followed by Barcelona with 7% and Malaga with 7%.

They took advantage of the break to refresh themselves.. For their part, offices that have traditionally remained in exclusive use have taken advantage of the post-pandemic break to refurbish their premises. Offices are increasingly being designed to balance productivity and employee well-being, which is also appealing to Generation Z.

As Savills’ Q2 report explains, office refurbishment has played a key role in the introduction of new technology and green features into offices. These improvements have helped attract new tenants, especially in central areas where competition for office space is higher.

In Hatak | Going to the office comes at a cost, and some researchers have found that working remotely costs 7% less.

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