- Quality office space remains in high demand despite the prevalence of remote work
- United States is likely to have highest future office space availability
- Singapore, Seoul and Mumbai expected to see lower office space surplus by 2033
Singapore, Seoul and Mumbai are expected to experience lower office space surplus by 2033, according to a new report from Savills which offers insight into global office markets and future office availability.
Savills Future Office Availability Index
As employees are slowly but surely returning to the office, whether full-time or as part of a hybrid arrangement, Savills’ Future Office Availability Index synthesises trends, projected economic growth, demographics, and development pipelines, to predict the future office availability of key markets worldwide.
Executive Director of Savills Research and Consultancy Alan Cheong says, “While office space in most developed economies faces excess supply in the coming years, Singapore remains a relatively tight market due to a lack of new supply, which offsets the expected decrease in demand as companies adopt hybrid work models.”
The Index revealed the United States is likely to have the highest future office availability, while supply for cities across the Asia Pacific region are expected to be the lowest. However, European cities are falling in the middle, ably maintaining a balanced supply and demand dynamic.
“Many occupiers have already implemented ‘return to office’ mandates in 2023, which is expected to drive short-term office demand,” said Cheong.
“This will gradually reduce the surplus space in some locations, offering tenants a range of options to choose from.”
What the results mean
Savills World Research Associate Kelcie Sellers says this isn’t just about offices becoming empty due to some cities seeing lower return to work levels post-pandemic.
“It’s about how long-term economic, demographic and development trends interact with working patterns, to determine which cities potentially need to focus most closely on retrofitting and repurposing excess office space to other uses,” she said.
“Our analysis shows a broad East-West divide as office in Asia Pacific is supported by expanding service economies, younger populations, cultural factors, a limited supply of buildings, and newer ‘greener’ stock.
“Elsewhere, the future supply dynamic is more nuanced, due to projected lower utilisation rates and an over-supply of pre-2010 buildings which tend to have lower sustainability credentials.”
Head of Occupational Markets EMEA Savills Jeremy Bates says while there have been a litany of headlines about corporate occupiers’ space strategies, largely led by some turbulence in parts of the tech sector, quality office space remains in high demand.
“Long term, however, we need to consider all the factors that generate tenant demand and accept that in some locations, this will lead to the offices market looking quite different in 10 years’ time, with occupier requirements centring around an increasingly narrow definition of prime space,” he said.
