Only 17% of CEOs Now Plan to Downsize Their Office Footprint

As office re-openings get closer, a surprising number of CEOs are looking for a return to pre-pandemic office uses, according to the 2021 CEO Outlook Pulse Survey from KPMG.

Only 17% of respondents said that they will downsize their company’s footprint. In KPMG’s August 2020 survey, 69% of CEOs said they would reduce their office footprint. On top of that, only 30% said they will have most employees working remotely between two and three days for a week.

Only 14% of respondents said they will examine shared office spaces to increase employee workplace flexibility.

For office landlords, these findings are good news, especially in light of the more pessimistic predictions of what will happen to office space once the world returns to normal.

For instance, a February survey of nearly 200 people from CoreNet Global said workers will spend roughly half of the workweek at the office and the remaining time either in a home office, remote location or co-working space once the pandemic ends. 

With fewer workers coming in, companies will need less space. Fifty-four percent of the companies surveyed say the overall corporate footprint is expected to be smaller two years from now. Fourteen percent expect to see a decrease of greater than 30% in space. Another 31% see a reduction of 10% to 30%, while 9% predict a decrease of less than 10%.

In a segment on CNBC’s ‘Squawk on the Street,’ Brett White, Cushman & Wakefield’s CEO and executive chairman, said the number of people working from home could double from 5% to 10%. An additional 30% of office workers were allowed to work from home one or two days a week before the pandemic. White thinks that number will jump 50% to 60% after the pandemic. 

Overall, White could see companies with these agile workforces reduce their footprint by 10%, 15% or even 30%.

One open question in the KPMG survey is exactly when life will return to normal, even with vaccinations ramping up. Thirty-one percent of respondents anticipate a return to normal in 2021, while 45% expect normality in 2022, according to KPMG. Twenty-four percent of respondents say their business will change forever.

Sixty-one percent of companies said that they are waiting for a successful vaccine rollout in their key markets before they ask staff to return, according to KPMG. Three-quarters, 76%, say they will wait for governments to encourage businesses to return to normal, while only 5% will initiate returns based on competitive factors.