A new report shows that Canadian office occupancy levels are going to incrementally rise through to 2024.
According to analysis from Colliers, average office occupancy in the country is anticipated to grow by 1.5 percentage points this year, eventually reaching a peak of 15% in 2024.
“We initially thought the office market would pick up faster, but that’s not what tenants are telling us,” said John Duda, president of Colliers Real Estate Management Services in Canada.
“We expect that by the end of 2023, we’ll understand what’s going on with the economy, with interest rates and hybrid work, and companies will start making longer-term decisions about the future of the office.”
While the state of the economy is ever-evolving, the threat of a potential global recession has driven more companies to shed office space. In fact, 44% of respondents said they would not offer a dedicated workspace for all workers.
Simultaneously, demand for flexibility has grown, with 21% of companies expressing interest in incorporating flexible offices into their network.
Still, the balance between in-person and remote work is in a state of flux, with companies unsure of how much time workers should split between the two arrangements. Without having a concrete hybrid work policy, companies will have trouble outlining exactly how much real estate they will require.
“It’s going to be a few years of experimenting. Once the market is stabilized, I think we’ll see some definitive solutions come into play,” said Duda.
“It doesn’t necessarily mean companies will need less space overall…but I think over the next two years, we’re going to better understand the impact of work-from-home.”