One in five companies with office expansion plans are looking to increase their office footprint due to over-contraction or bigger-than-predicted return-to-office numbers, research from CBRE’s 2025 European Office Occupier Survey finds.
This equates to 21% of companies looking to expand their footprint in the face of shortfalls in office space, which is up from 7% in 2024 as the market faces ongoing challenges to accommodate shifting return-to-office mandates.
Limited space in the face of growing requirements remains difficult, particularly in the UK market where post-pandemic office downsizing was more prevalent, with one in three UK companies now expanding doing so in response to greater-than-expected return to office or over-contraction, according to CBRE. This is the biggest shift year-on-year recorded by the agency.
Business growth and increased personnel were cited as the primary reason for expansion by companies surveyed. For companies looking to downsize, around 70% were motivated by hybrid working, and 56% cited cost as a key factor.
Fluctuating and differing office mandates across sectors continues to drive uncertainty in the occupational markets. The gap between employer expectations and employee attendance levels hinders office utilisation rates which stand at an average of 46% a week and 71% on a peak day, according to CBRE. Of those surveyed, 54% of employers would like office attendance levels to be over three days a week, while statistics showed only 42% of employers are achieving this.
This disparity differs depending on the sector, with 61% of financial services firms looking for over three days a week in the office and 32% achieving this. Looking ahead, 57% of financial services companies expect bigger requirements.
More widely statistics showed sentiment regarding the return to office is strong, with 47% predicting an rise in attendance, up from 31% this time last year. Cultivating a vibrant and engaging office atmosphere was identified as the greatest obstacle in drawing staff back to the office, the report found.
Anna Esteban, managing director, leasing and occupier accounts for Europe at CBRE, said: “Quick commutes and local amenities cannot be underestimated, but the attraction strategy is a key component to success when it comes to office usage. Stronger ‘pull’ factors, that create vibrancy throughout the week must be considered alongside ‘push’ strategies in order to achieve optimum attendance levels.”
Occupiers said stay-versus-go analysis noted decisions were driven by: employees’ location preferences, which drove 72% of renewals and 51% of relocations; cost which motivated 68% of renewals and 53% of relocations; and sustainability, which was a reason for 60% of renewals and 58% of relocations, research found.
Others facing relocation in the coming few years said they had concerns about undersupply of new stock, with 52% identifying provision of high-quality, well-located stock as a source of unease. This was particularly prevalent in the financial services sector, where 63% of respondents noted concerns and in 57% of companies with over 10,000 employees. Geographically, 60% of occupiers in the UK stated cause for concern over supply of quality stock, closely followed by Italian companies which came in at 57%.
Esteban added: “The over-contraction we’ve seen in recent years only adds to pipeline pressures, as the type of office space at the top of the wish list is scarce. In turn, this makes the ‘stay’ option even more compelling, as well as close, substitute locations. Investors should be attuned to where the spillover may go.”
Top locations for office moves were centred around central business districts for 47% of those surveyed, evidencing a pivot away from the suburbs, specifically in Spain, France, Germany, Italy and the UK at 67%, 64%, 62%, 62% and 55% respectively.