Major UK Bank Says Office Return May Have Peaked

A major UK bank has said the global office return may have already peaked in many countries, with remote working likely to see office attendance level off at only half of pre-pandemic levels.

An HSBC global briefing note seen by Bisnow said that remote working is now “entrenched” in many mature economies such as the UK and the U.S.

The UK bank said that although office workers have trudged back to their desks in increasing numbers since late last year "the next stage of working trends will have a marked impact on the economy — both in terms of urban activity and broader economic performance”.

"With offices only half full in most of the developed world, many will be expecting office occupancy to continue to grind higher," the note said.

"However, it’s worth keeping in mind the alternative: that occupancy could be already close to a peak. If it is, we could see further divergence in economic performance and property demand by region, with suburbs and lower-density areas continuing to outperform.”

The report noted that the number of days that employees in different countries wanted to work remotely differed from the number of remote workdays planned by employers. UK workers aspired to spend just under two days at home per week on average, around double the level planned by employers.

The report analysed a number of factors such as transport use in London, and swipecard access in the U.S. to assess the overall pattern of behaviour for office workers. 

In the UK it noted that only 60% of the number of weekday journeys were happening compared to pre-pandemic levels. London’s wider workplace data had ‘edged up’ the bank said, but still stood at a lower level than retail and recreation — people are more willing to travel for fun than work.

The report indicated that office work attendance across Europe and the U.S. had bounced back following the first omicron wave in late 2021 and as the majority of Covid restrictions had eased.

However, HSBC said that in these regions as well the level of activity in offices was way below those shown in other sectors such as leisure, where people had mostly returned to pre-pandemic levels of activity.

“After a bounce-back in urban mobility data in the second half of 2021 as the bulk of Covid-19 restrictions eased, we saw a pull-back at the end of 2021 and the start of 2022 due to the spike in Omicron cases in the U.S. and Europe," the report said. 

“Since then, data on the office return have bounced back to the prevailing levels seen in November, but haven’t moved notably higher.”

HSBC noted that Kastle Systems — whose CEO Haniel Lynn appeared on Bisnow's recent Podcast — provided the “best barometer” of office attendance in the U.S., which the bank said “suggests that across the U.S. office attendance is only back at 40% of its pre-pandemic level and is struggling to go much higher”.

HSBC said that the office trend was “striking when put against the return to leisure activities — where we can see the number of diners, air travellers and event basketball games are back at around 90% of pre-pandemic levels.”

Kastle Systems collates data from swipes of building access cards and publishes weekly barometers of keycard entries into 10 of the largest cities in the U.S. The latest occupancy stood at 39.5% — down slightly on the previous week.