From Manukau to Musk, and everything in between: Takeaways from CBRE’s Office Occupier surveys in New Zealand and around the world

Our second, 2024 New Zealand Office Occupier Sentiment Survey Report, which was released last month, has expanded our understanding of how Kiwi occupiers approach hybrid working, workplace design and utilisation, and their real estate strategy. It shows how and where we continue to forge our own path as a country as the popular hybrid working model continues to be refined here and overseas.

This year’s survey also covers more ground. It provides insights from 160 corporate real estate executives whose organisations represent 18 sectors and occupy 428,000sqm of office space across Auckland, Wellington and Christchurch – a far larger sample than in 2023. 

The report reveals that Kiwis are using the office more, with 62% now the office utilisation average across a typical Kiwi work week, up from 59% last year. New Zealand employees now work from the office an average of 3.3 days per week – up from 3.2 this time last year. 

The most notable increases occurred in the public sector where the average lifted from 2.5 to three days per week. The legal sector’s already-highest attendance rate has lifted further to an average of 4.1 days per week.

Acceptance of current state of office attendance by overall and selected industries

Office attendance expectations and actual visits in a typical week

The average number of days that workers spend in the office each week varies across our three main centres, with Auckland at three days per week, Wellington 3.3 days and Christchurch 3.8 days per week. And 58% of organisations have made changes to their workplace design as a result of new ways of working, up 6% on last year, adjusting towards greater employee presence in the office. 

Kirstin Cooper, CBRE New Zealand’s Associate Director, Workplace Consulting: “The increase in office attendance represents a fine-tuning of hybrid working practices, which continues to be used by 91% of workplaces surveyed. It is now firmly entrenched as a business-as-usual practice in New Zealand, and the data suggests that refinement of hybrid work practices will continue to boost future office attendance.
We see a future reduction in working from home by an overall net 15% of respondents”. “It has also been well documented globally that businesses are looking at productivity, and mandates to bring their people back to the office. Our view is that if occupiers are considering how to improve their productivity through their office set-up, and possibly looking to change their policy, our survey shows that now may be a good time to look at it again.”

Which of the week is considered a peak day?

Kirstin Cooper directs occupier attention towards five key takeaways:

1. With hybrid working now a standard practice, occupiers should reassess their current hybrid working strategies to ensure they align with their business needs. 
   “Occupiers should evaluate whether the time your employees spend in the office and the purposes for which they use the office space are still effective. Hybrid working may not reduce the need for office space, but it will influence how that space is utilised.”
2. As businesses transitioned back to the office post-COVID, there was a significant shift towards allocating more space for collaboration.
   
   “Four years on, it has become clear that while employees do come in for collaboration, their days are not solely focused on it. So, when planning your next office fitout, consider the best mix of collaborative, focused, and communal spaces to meet the diverse needs of your employees.”
3. Relocating remains a prominent real estate strategy for many occupiers. 
   “There is no denying that a modern, well-maintained space in a good building will attract more people to the office compared to an outdated workspace. If you have a lease event approaching, give yourself time to achieve the desired outcome. 
   As a guide, businesses needing around 1,000 sqm should start their search at least 12 months before their lease expires. This is essential due to the current market’s limited availability of premium and A-grade spaces. For larger requirements, you will need to begin even earlier.”
   
   Stefan Winstanley, CBRE New Zealand’s Director, Office Leasing, Auckland, adds that most businesses the team speaks to are “surprised how active the leasing market is, especially in organisations with 80+ staff. The fundamentals of property don’t change; well-located and well-appointed stock is in demand, and the smart businesses are taking advantage of the spike in vacancy we saw in 2021/22 and creating office space to suit their needs now.
   
   “What has also stood out to us is tenants willing to take longer leases to get the incentive required to move to better locations and upgraded offices. It stands to reason that people are the most important resource a company has, so if you want your company to fly you need to look after what is essential.”
4. The impact of hybrid working on productivity is a common concern for occupiers. 
   “If your business is reviewing its hybrid working policies or planning changes to the workplace, we recommend first determining a reliable method to measure your productivity to ensure any changes are informed by accurate data, not speculation.”
5. New Zealand is embracing hybrid working in different ways to markets in other parts of the world.
   
   CBRE’s APAC Office Occupier Survey, which was published in September, showed that 70% of occupiers surveyed want their employees to attend the office at least 3 days per week, with 36% aiming to have their employees attend the office for a full five-day work week.
   
   Companies in mainland China have the highest expectations, with 69% expecting staff to be in the office five days per week.
   
   Interestingly, employees in the APAC region are showing slightly higher office attendance than companies are requesting, suggesting a strong commitment to being present in the workplace and indicating a complete return to the office.
   
   The proportion of companies in Asia Pacific (43%) reporting a peak utilisation rate of 80% and above was higher than their counterparts in Europe (26%) and the U.S. (30%).

This contrasts with the picture in the USA:

CBRE’s 2024 Americas Office Occupier Sentiment Survey provides insights from 225 corporate real estate executives overseeing office portfolios across the US, Canada and Latin America.

This is set against a backdrop of major organisations requiring staff to return to the office. Amazon last month mandated corporate workers return to the office five days a week beginning January 2nd 2025, following Tesla CEO Elon Musk’s 2022 demand that Tesla employees must return to the office for at least 40 hours per week or be let go.

In the US, approximately 80% of organisations have a return-to-office policy, but only 17% actively enforce these policies, leading to a gap between employer expectations and employee behaviour: 60% of employers want employees to work in the office three or more days per week, but only 51% of employees are in the office that frequently. Conversely, 37% of employees show up 1-2 days a week, yet only 17% of employers are satisfied with that.

More organisations have accepted that they have reached a steady state with their utilisation: 64% of respondents report that their current office utilisation patterns are at a steady state, up from 60% last year and 43% in 2022. This suggests that organisations have largely accepted hybrid working patterns as a new normal.

In Europe, where CBRE’s 2024 European Office Occupier Sentiment Survey canvassed the views of over 120 companies, over 75% of respondents now have some form of attendance policy in place, but it is only mandatory for around half of them. Office attendance is rising, with 61% of companies reporting average utilisation of between 41-80%, compared with 48% of companies last year. And nearly a third of companies expect a further increase in attendance levels.

Extent of measurement and enforcement of policy mandates

Kirstin Cooper says that when comparing New Zealand with these other regions of the globe, the direction of hybrid working is most interesting. “While hybrid working is here to stay, we have seen an increase in time in the office as more sectors of our economy return to the office. 

“Our research suggests that we haven’t yet reached a ‘steady state’ regarding hybrid working. What we are seeing increasingly overseas, and to some extent in New Zealand, is occupiers taking a firmer stance on hybrid working, and mandating employees to come into the office for a minimum number of days per week. Some are also assigning more tangible consequences to these mandates, with time in office directly linked to pay reviews or promotion opportunities. On the flipside, other occupiers have firmly embedded a hybrid working model of two or three days in the office per week, and have already made longer-term workplace decisions based on this.

“It will be really interesting to see how this all plays out over the next few years.”