It’s no secret that hybrid and remote work is creating office vacancy challenges in the U.S. — and that the commercial office market has seen better days — but China’s situation paints an even grimmer picture.
As of June, nearly 24% of office-tower space in 18 major Chinese cities remained unoccupied — a figure that surpasses the U.S.’s record high office vacancy rate, according to an analysis of CBRE data published by The Wall Street Journal.
The downturn in China’s office market could be attributed to several factors including youth unemployment, higher regulatory pressures on the private sector companies, and global economic slowdowns, but perhaps the biggest factor has been commercial developers building too many commercial office spaces.
The global pandemic accelerated the adoption of remote and hybrid work, and as a result has reduced the overall global demand for traditional office spaces. However, the return to office tug-of-war has been more of a challenge in Western countries, according to The Wall Street Journal. Additionally, economic uncertainties such as high interest rates and the rapid development of technology have made it easier for companies to operate with a decentralized workforce.
With two of the world’s largest economies now facing very high office vacancy rates, what does this mean for the future of work? It’s a question that will continue to loom over the workforce as companies continue to reevaluate their need for physical office spaces in this year and next. Whether high vacancy rates are temporary, or a much longer-term trend remains to be seen.