Office Strategies in the Age of Human Capital Management

From July – August 2023, CBRE Japan conducted a survey to gauge the current state of the office market by summarizing the opinions of office users regarding post-COVID 19 working styles and the role of the office.

Key findings include:

-Work styles

• The current average office attendance rate is 70%. Future assumptions are at the same level, suggesting that office attendance rates have now stabilized following the pandemic. Office seat-to-employee ratios, on the other hand, are projected to remain at around 90%, meaning that any reductions in office space are likely to be limited in scope.
• Reductions in standard office space are likely to be the result of conversions to “private rooms, conference rooms, and meeting spaces” or “public spaces”, underscoring the increased focus on the office’s function as a community hub.
• The fact that lower office attendance rates are unlikely to lead to reductions in office space is further supported by the fact that 24% of respondents are planning to expand their office space, slightly above the 21% planning to reduce. A significant percentage of any reduction in primary office space is likely to re-emerge as additional demand for flexible office space.

-Office strategies

• With improved outlook on their business environment, more companies are looking to improve their operating environment by relocating (24%) than by expanding, contracting, or changing office layouts within their current building (19%).
• The most important criterion for the selection of a new office building is location, while the most highly prioritized factor for location selection is workers’ commuting convenience. This is a reflection of companies’ desire to gain an advantage in the competition to secure the best quality talent.
• Certain criteria for building selection saw significant differences in perceived importance based on company size. There are some factors that are seen to exert an influence on the selection process although not necessarily essential. At the same time, there are other items the convenience of which only becomes apparent with experience and may serve as a strong incentive to keep tenants from leaving. As such , even factors not mentioned by many respondents in the survey cannot afford to be totally disregarded.