Asia Office Occupancy Rates Outperforms US, Europe
GLOBAL – Three years into the virus outbreak, data shows that physical office occupancy levels in Asia surpasses that in Europe and the Middle East (EMEA) as well as the United States, reported The Wall Street Journal (WSJ) on Tuesday evening (28 February, SGT).
At present, US office occupancy rates hovers between 40 percent and 60 percent of pre-COVID levels. In comparison, that in EMEA ranges from 70 percent to 90 percent, according to figures published by Jones Lang LaSalle (JLL).
In Asia, the actual office occupancy rates are even higher at 80 percent to 110 percent, signifying that there are more people in the office in some cities than prior to the COVID-19 pandemic.
JLL pointed out that some Asian cities including Singapore, Seoul, and Tokyo experienced periods, when over 75 percent of their employees had returned to their offices in 2021 and 2022.
Aside from that, coworking space operators have registered lower occupancy for outlets located in some major US metropolises. For instance, WeWork disclosed that only 72 percent of its desks in New York were occupied as of Q4 2022, versus 80 percent in Paris, 81 percent in London and 82 percent in Singapore.
However, market observers predict that the office utilisation gap between the United States and the rest of the world would continue.
It doesn’t help that office properties in the US were more vacant long before the pandemic. A construction binge resulted in high office vacancy levels. And even inside leased office space, tenants in the United States tend to put fewer staff on each level compared to their European and Asian counterparts.
Phil Kirschner, an Associate Partner at business consulting firm McKinsey & Co, thinks that all that vacant office space in the US is now perpetuating a negative reinforcing cycle. Americans working in large, mostly empty offices would find the experience depressing, making them more likely to remain at home in the first place. “It feels less energetic,” he explained.