Hybrid working could wipe out $1.3 trillion of real estate
September 6, 2023 - Hybrid working practices, invoked after Covid lockdowns sent millions of office staff home to work, could erase as much as $1.3 trillion off the value of real estate in nine major cities by 2030.
More that three years after millions of office workers were sent home during Covid-19 lockdowns, companies are still trying to adapt to lasting changes to corporate life.
Hybrid working practices differ markedly around the world, with Asian and European workers largely returning to offices at a faster pace than those in the Americas.
Asia controlled the pandemic better than most, so workers there did not become accustomed to working from home to the same degree as those on other continents – making it much easier for them to switch back to office life.
The UK has one of the highest rates of remote working, whereas France has one of the lowest, with several other European countries enshrining into law new flexible work schedules.
How these seismic shifts in work habits play out will have significant economic consequences, according to a new report by McKinsey Global Institute.
For example, office occupancy rates in the United States have plateaued at around half of pre-Covid levels, with building lobbies virtual ghost towns on Fridays.
Under a moderate outlook, McKinsey estimate that around $800 billion could be wiped off the value of office buildings in nine major cities, or as much as $1.3 trillion in a worst-case scenario.
It would seem that work is no longer a place people go to, but rather a thing they do – wherever that may be.