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Only 17% of Global CEOs Plan to Reduce Office Footprint Post-COVID; Office Demand Activity Posts Significant Gains

  • March 26, 2021

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A KPMG survey of global CEOs shows that only 17% are considering downsizing their office space in the post-pandemic period – a drop from 69% recorded last August. Approximately one-third of the 500 CEOs in 11 key markets interviewed also anticipate a return to normal business operations this year, while 45 percent expect normality to resume in 2022. (KPMG 2021 CEO Outlook Pulse Survey

Key Findings

  • The COVID-19 vaccine rollout is providing leaders with a dose of optimism as they prepare for a new reality,” KPMG Global Chairman and CEO Bill Thomas said. The report shows that global CEOS are:

» Less likely to downsize their physical footprint compared to 6 months ago

» Encouraged to reopening workplaces by government action and vaccination rates

» Apprehensive about a fully remote workforce

» Concerned increasingly about cyber security as remote working has increased

» Overwhelmingly looking to increase focus on ESG issues

 Office Demand Improving:

  • Additionally, the survey shows only 21% of businesses are looking to hire employees who work predominantly remotely – a significant reduction from 73% in 2020. The KPMG interviews with CEOs were conducted in February and March of this year. (Workplace Insight, March 24 and GlobeSt, March 25)

  • The outlook for office demand is on the upswing, supported by recent data by the national VTS Office Demand Index (VODI) that shows both in-person and virtual tenant tours posted large gains in January and February.

  • The VTS report shows that recent office demand activity is 38% lower compared to pre-pandemic levels – after having plummeted over 85% from February to May 2020. Additionally, all seven core office markets covered by VODI saw an increase in demand for office space in February 2021 compared to October 2020.

  • “While we saw some growth in demand in the back half of 2020, the exponential increase in the first two months of 2021, (combined) with the announcement from the Biden Administration that all Americans will be eligible for the vaccine by May 1, 2021, is providing confidence that a meaningful recovery is on the horizon,” VTS CEO Nick Romito said. (GlobeSt, March 25)

Noteworthy:

  • Microsoft will allow 57,000 employees back to its headquarters in suburban Seattle on March 28, although workers can choose whether to continue working remotely or a hybrid approach combining home and office. (AP, March 22)

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