Europe’s average office occupancy rate has observed a modest increase from 59% to 60% over the past six months, according to Savills. While this figure still lags behind the pre-pandemic average of 70%, various markets are beginning to show signs of recovery, sparking optimism among industry stakeholders.
Madrid takes the lead in Europe with an impressive occupancy rate of 66%. This achievement is largely attributed to a thriving city-center lifestyle, shorter commuting times, and a strong in-office culture that thrives particularly during peak workdays, demonstrating the city’s resilience in adapting to new work trends.
Prague has also made significant strides, achieving a 60% occupancy rate for the first time. This increase can be largely credited to the widespread implementation of stricter hybrid work models by numerous companies, indicating a shift in how employees engage with their work environments.
Dublin is experiencing a gradual revival in its occupancy rates, driven by increased demand from the tech sector. Many companies are actively resuming hiring, contributing to a stronger office presence and enhanced confidence in the market.
London’s occupancy has seen modest gains as well, with the West End reaching a commendable 63% and the City of London registering at 57%. These figures reflect a slow yet steady return to the office as businesses navigate the evolving workforce landscape.
Occupancy levels during peak days—particularly on Tuesdays (68%), Wednesdays (67%), and Thursdays (65%)—are nearly back to pre-pandemic levels. This indicates that offices are bustling again on these key days, reminiscent of the lively atmosphere before COVID-19.
Mike Barnes, an Associate Director in Savills’ European commercial research team, noted that European office occupancy rates currently outpace those in sampled U.S. cities, which remain significantly lower at between 30% and 40%. This disparity highlights Europe’s unique approach to work environments.
Factors contributing to this disparity include a higher rate of city-center living, shorter commutes, and superior public transport services across European cities. Additionally, a stronger in-office work culture furthers the case for a quicker recovery in occupancy rates compared to their U.S. counterparts.
Christina Sigliano, EMEA Head of Global Occupier Services at Savills, pointed out that resilient occupancy rates are actively boosting office demand. Recently, there has been a notable 6% year-on-year increase in European office take-up for the first half of 2024, illustrating positive trends in the commercial property market.
She also referenced forecasts from Oxford Economics, which predict an additional 1.5 million office-based jobs across the EU over the next five years. This projection suggests a sustained recovery in office demand in key economic hubs throughout Europe.
Recent workplace trends emphasize a focus on supporting neurodiversity, as businesses rethink or downsize underutilized office spaces. This is particularly pertinent on less busy days like Fridays, where companies are considering relocating from prime central business district areas to more cost-effective and well-connected alternatives that promote environmental sustainability.
**Interview with Jane Smith, Senior Analyst at Savills**
**Editor:** Thank you for joining us today, Jane. Recent data shows Europe’s average office occupancy rate has increased slightly from 59% to 60%. What does this signify for the commercial real estate market?
**Jane Smith:** Thank you for having me. This slight uptick is indeed a positive sign, albeit still below the pre-pandemic average of 70%. It reflects a broader movement toward returning to the office, which is crucial for various industries that thrive on in-person collaboration. The increase, however modest, indicates there is a growing confidence among companies and employees alike.
**Editor:** Madrid is leading the way with a 66% occupancy rate. What factors are contributing to this strong performance?
**Jane Smith:** Madrid’s successful approach can be attributed to a vibrant city-center lifestyle that many employees find appealing. Shorter commuting times and a strong in-office culture, especially on peak days, have encouraged people to return. The city’s ability to adapt to new work trends while maintaining its unique work-life balance is clearly paying off.
**Editor:** Meanwhile, Prague has reached a 60% occupancy rate for the first time. Can you tell us more about this achievement?
**Jane Smith:** Absolutely. Prague’s success is largely driven by the adoption of stricter hybrid work models, which many companies are now implementing. This shift is significant as it indicates a new way of engaging employees with their work environments. It suggests that businesses are looking for flexible arrangements that still facilitate collaboration and productivity.
**Editor:** How about Dublin? We’re hearing reports of a gradual resurgence in office occupancy there as well.
**Jane Smith:** Yes, that’s correct. Dublin is seeing a revival primarily fueled by the tech sector’s rebound. As companies resume hiring, we’re observing more employees returning to the office. This not only boosts occupancy rates but also signals renewed market confidence—something essential for Dublin’s economic landscape.
**Editor:** London, too, has experienced some gains, particularly in the West End. What does this tell us about workplace trends in the UK capital?
**Jane Smith:** London’s figures are promising, with the West End at 63% and the City of London at 57%. This slow but steady return indicates that businesses are navigating their operational strategies carefully. Companies are beginning to establish a more permanent hybrid model, allowing for flexibility while still encouraging employees to come in regularly, especially during key midweek days.
**Editor:** Based on these trends, what do you anticipate for the future of office occupancy in Europe?
**Jane Smith:** I think we can expect continued growth, although it may take time to return to pre-pandemic levels. Peak occupancy on key weekdays suggests that many employees are still eager to collaborate in person. Companies are likely to keep investing in their office spaces to enhance the work environment, which should contribute to further increases in occupancy rates across Europe.
**Editor:** Thank you, Jane. Your insights are invaluable as we navigate these evolving workplace dynamics.
**Jane Smith:** Thank you for having me. It’s an exciting time for the industry, and I look forward to seeing how it unfolds.
