JLL: Asia and Europe lead back to the office trend, US lagging
The back to the office trend varies markedly from region to region and even from city to city, but Asians have been the most enthusiastic in returning to the workplace, followed by Europeans, while Americans are proving to be the most reluctant, according to new research by JLL.
US office occupancy stands at 40-60% of pre-pandemic levels, while in Europe and the Middle East is at 70-90% and in Asia it ranges from 80% to 110%, meaning that more people are working in offices than before Covid-19 hit.
The reasons why Americans are keen to continue working from home is that their homes tend to be bigger and accommodate a study or workstation and their commutes tend to be longer. In Asian and European cities apartments tend to be smaller, which makes working from home less appealing, and the commute to work faster and easier on public transport.
Studies show that Asian and European city centres have bounced back from the pandemic better because people have gone back to the office, supporting the network of shops, restaurants and cafés. By contrast, empty offices in New York or San Francisco have led to emptier city centres and a deepening economic crisis.
Manhattan-based workers are spending $12.4 billion less per year within the city than they were prior to the Covid-19 pandemic, according to research released last month by Stanford University.
The unemployment rate in New York City is now higher than the national average, largely because of the jobs lost in retail and hospitality since the pandemic.
According to JLL, cities like Seoul, Singapore, Tokyo, Paris and Stockholm have consistently recorded an over 75% return to the office rate, while no American city comes close to that rate. “The US has borne the brunt of this”, said Phil Ryan, Director City Futures, Global Insight, JLL.
As US cities were already dealing with an oversupply of office space, this trend is making a bad situation worse. Vacancy rates are expected to increase and the gap between Europe and the US to widen further.
The trend is reflected in WeWork figures: 72% of its desks in New York were leased at the end of last year, compared to 80% in Paris, 81% in London and 82% in Singapore.