Demand for office space has started slowing as the Delta variant causes a surge in Covid-19 cases in several regions of the world.
According to the VTS Office Demand Index (VODI), July saw virtual and in-person tour volume fall for the first time in six months. However, the monthly decline is still lower than 2018 and 2019’s July numbers.
“The delta variant is causing some uncertainty across the economy, so it’s no surprise we’re seeing that reflected in demand for office space as well,” said Nick Romito, CEO of VTS. “But there’s no need to hit the panic button yet. We’re likely looking at another delay to full recovery, but early indications point to continued relative stability as seen earlier in the year—not the massive drop-offs we saw when the pandemic first began.”
The VODI showed that new office demand fell 1.2% in July from June. Still, office demand is also up 282% year-over-year, which indicates that recovery is still on the horizon.
So far, it appears that opinions on office recovery vary from expert to expert, with some expecting a steady decline in demand and others anticipating a strong return.