According to a recent Ifo Konjunkturumfrage, over a quarter of German companies, 26.3%, believe their office spaces are not adequately utilized. As a result, more and more companies are considering downsizing their office spaces. Currently, 10.3% of companies have already reduced their office space and 12.5% plan to do so within the next five years. “The trend towards downsizing has intensified compared to our last survey. The main reason for this is the underutilization of office spaces due to the implementation of home office” said Ifo researcher Simon Krause.
Since August 2024, the proportion of companies with successful downsizing has increased from 6.2% to 10.3% and the proportion with planned downsizing has risen from 8.3% to 12.5%. Some companies have already reduced their space and intend to continue doing so in the future. Large service companies, in particular, frequently reduce their offices. 19.2% have already downsized and 22.7% plan to do so within the next five years. In the industry (9.7% have downsized, 10.1% plan to), retail (4.1% and 8.2%), construction (1.3% and 2.9%) and small companies (6.6% and 9.5%), the proportion is lower. “The office real estate market is undergoing a structural transformation” said Krause. “Companies are increasingly focusing on efficiency, flexible use and new workplace concepts.”
The increasing trend towards downsizing is also supported by new figures on office utilization. Currently, 26.3% of companies report underutilization of their office space. Only 4.6% report overutilization and 69.2% see a suitable utilization. Industries such as advertising and market research (60.9%), information services (59.6%), film and television (59.4%), IT (53.4%) and telecommunications (49.5%) are particularly affected by underutilization of office space. “Our findings show that many offices are larger than the actual usage demands” said Krause. “For many companies, this is a reason to reconsider their space requirements, especially in economically strained times. This imbalance increases the adjustment pressure and will keep the office real estate market occupied due to long-term leases for years to come.