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Empty offices – a catalyst for city centre transformation?

Real Estate news

As ‘hybrid work’ becomes the norm, businesses are downsizing, leading to an increase in vacant office spaces.

Many companies now prefer smaller, high-quality spaces, a trend confirmed in the UK by commercial real estate firm JLL, which reports that 48% of its clients in major markets plan to reduce their office footprints within the next three to five years.

This downsizing is expected to create a surplus of commercial real estate. Leesman, a workplace research firm, predicts that total space reductions could reach 40%, which in central London alone equates to 56.6 million square feet of office space becoming available, according to a report in British state media.

Companies are prioritising newer, ‘environmentally certified’ buildings, leaving older, lower-grade offices vacant. Despite the challenges, experts believe the commercial real estate industry will adapt rather than collapse. Vacant buildings may be transformed into mixed-use spaces, integrating residential, retail, and leisure facilities to create vibrant, multi-functional urban areas.

This shift requires significant investment and time, but the potential exists to rejuvenate city centres, making them more appealing and dynamic. Examples like New York’s Hudson Yards and London’s Coal Drops Yard illustrate the successful integration of diverse urban functions, providing a blueprint for future developments.

Ultimately, the recalibration of city centres from business-centric hubs to lifestyle-oriented spaces is underway, though the transition will be gradual and complex.

‘In most large cities, there is going to be an oversupply of average and bad spaces,’ says Tim Oldman, founder and CEO of Leesman. ‘Developers might be forced to the cliff edge to be creative, but they have around five years to prepare, mobilise and get ready for the future that’s coming.’

Image credit: Sergei Wing

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4 COMMENTS

  1. Now…watch these ’empty spaces’ become apartments / condominiums with oppressive HOA’s Council Rules, and modified land & structures laws.
    This is how the :15 Minute Cities are going to be hatched overnight…as per Klaus Schwab and Larry Fink; both of who are AshkeNAZI J3w$ who, as a group of only 5% of the U.S. population, controls 78% of the wealth in that country, as well as ‘owning’ the U.S. Congress and manning the Presidential Executive Branch Cabinet with…J3w$!

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