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But we need to dig a bit deeper, especially as the Remit figures are often widely repeated.
First, what was the actual occupancy as a percentage of total office capacity pre-Covid? Frustratingly, while we now do a weekly count of people at work within our own portfolio, we do not have an accurate pre-Covid percentage for comparison.
Research in 2010 by the British Council for Offices cited an average occupancy rate of 60%, so it is clear that even if Remit’s figures are correct, they only signal a halving of occupancy, rather than the figure being down two thirds, as some people claim.
Most offices are designed to be occupied by one person every 80 sq ft or 100 sq ft, but in reality, very few have ever been occupied at that level.
What percentage of the total workforce have ever attended every day? Bear in mind holidays, illness, travelling and client meetings, and a ‘full house’ is rare, particularly in larger offices.
Without a precise pre-Covid baseline, any post-Covid occupancy levels are open to being misinterpreted quite markedly. So what data is consistent pre- and post-Covid?
For London, the best indicator is Transport for London (TfL) information. TfL publishes data on the daily use of tubes and buses taken from turnstile touch-ins. The margin of error for this data is low and constant pre- and post-Covid.
The latest data shows that on Thursday 9 June this year, 2.94 million passengers used the tube, compared with 3.91 million on Thursday 5 March 2020, before the pandemic took hold. That is 25% fewer passengers, not 50% fewer. Interestingly, the difference between Sunday 8 March 2020 and Sunday 12 June 2022 is only 2.5%, based on around 1.8 million passengers.
I would therefore conclude the midweek variable is mainly the office worker who has either transferred to the bus, where journeys are only down 15%, found an alternative travel mode, is perhaps walking, running or cycling, or is working from home. The least positive interpretation of the data is an office occupancy level of around 65% compared with previous rates, rather than Remit’s 29.3%.
To further advance my argument, recent Google data shows that 60% to 70% of City employees are back at their desks. This also chimes with the occupancy figures for our own portfolio of between 60% to 75%, depending on the building.
In discussions with London agents, none are saying that their clients’ space requirements have reduced as a result of the pandemic. Some have reduced as their business has changed, but this would have occurred with or without the pandemic.
Damaging corporate DNA
My strong view remains that working from home on more than the odd occasion is less efficient and I fear the unique DNA of each organisation will suffer if employees are remote from each other for much of the time, especially as the UK has a well-acknowledged productivity problem.
Networks, connections and serendipity all have an important part to play in creativity. How can the inexperienced learn from the experienced and the old learn from the young? How can new joiners be onboarded successfully?
London goes from strength to strength and was most recently given a fillip with the opening of the Elizabeth line. It is an absolute triumph and brings an extra 1.5 million people within a 45-minute journey time of central London. Watch rents increase along the line.
Best-in-class offices with top sustainability criteria and high-quality amenities will be much in demand as the office market continues to bifurcate. And you only have to visit most central London offices – aside from during dreaded rail strikes – to see that they are a lot more than one third occupied.
Gerald Kaye is chief executive of developer Helical More
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