X

Commercial Property: Are offices becoming popular again?

The fate of commercial office space in the post-remote-work era is currently a mixed picture, influenced by region, industry, and company culture. While remote and hybrid work remain popular, certain trends suggest a partial rebound in office space demand.

Many companies are embracing 2 - 3 days in-office hybrid schedules, which is creating a continued need for office space, though often at reduced square footage per employee. In particular tech, finance, and legal industries are leading this structured return.

However, rather than occupying more space, companies are upgrading to better-located, well-designed buildings with modern amenities such as wellness spaces and flexible layouts.

This trend is called the "flight to quality" and it's revitalising premium commercial zones, even as outdated buildings sit vacant.

The preferred format of corporate culture and collaboration

Large corporations are still investing in office space as they see closer working relations promoting collaboration, onboarding, and innovation. These companies argue that in-person interaction is essential for productivity and mentoring. In some global business hubs, leasing activity has stabilised or increased for high-quality, energy-efficient offices, even to the point of creating shortages in prime office space.

Counter pressures

However, there are still reasons that many are holding off from the return to office space. This leaves high vacancy in older buildings, especially, which means low rental yield, and in other buildings higher rentals have been introduced in an attempt to compensate. In addition, an ever greater number of tenants are prioritising environmental standards, such as green certifications, smart tech and commute-friendly locations, leaving secondary stock stranded.

Remote work still rules smaller smart operations such as tech startups, creative agencies, and consultancies with distributed teams. These companies are continuing to reduce or avoid office footprints - with some fully divested from traditional office leases, opting instead for popular co-working hubs.

There's no doubt that economic uncertainty and pressure on profits are pushing firms to rethink space usage - leading to downsizing, desk-sharing, or even sub-leasing excess space.

The response to decreasing commercial space demand has been to turn to residential conversions, turning offices into flats or mixed-use developments. This trend is accelerating due to zoning flexibility and the housing affordability crisis in urban areas.

Regional variations

The office space choices are wide-ranging and varied. In some areas, hybrid will be favoured, in others, a return to offices and close teamwork is more popular. Interestingly, when office space is called for, it is often quality space that is sought. There is a strong return to office space in various areas such as Singapore, India, Japan and South Korea, Dubai, Cape Town and Nairobi.

However, the growth is slow, depending on infrastructure and costs. Areas that prefer hybrid or remote are the northern United States, Nordic countries and Germany. So it seems that the return is happening, but it will probably never have the same profile as the pre-pandemic office world.

While generally demand has not returned to pre-2020 levels, there is definitely a sense of evolution in the nature of office usage. There is a preference for more flexible, higher-quality, and purpose-driven spaces. Within companies, there is less emphasis on headcount capacity and more on collaboration and brand presence - both of which can work in a remote or hybrid scheme. As a result, mid to long-term leasing strategies are adjusting to hybrid realities.

So the short answer to the question of: is there a return to office space?...is yes...there is a return...but not a reversal. Because of the changing workforce landscape, the type of work required, and the capacity technology has provided for remote work with the efficiency of in-office connection, the office of the future will be leaner, greener, and continually re-designed to complement an advanced hybrid workforce.


18 Aug 2025
Author Leapfrog Property Group
1 of 618