Corporations are looking to enhance office models, with the rise of AI and business transformation requirements putting pressure on outdated workplaces, a new report by global property consultancy Knight Frank has found.
The fourth edition of Knight Frank’s (Y)OUR SPACE survey of almost 300 global corporate real estate leaders revealed multinational corporations were investing in regional hubs to build resilience and flexibility as they sought to balance costs with the need to transform their business operations and offer tech-enabled hybrid workplaces.
The research found:
- Workstyle evolution (how space can serve culture, cohesion and performance) remained a key factor for nearly 30% of respondents and the third most influential factor in shaping real estate strategy over the next three years.
- Despite high profile ‘return to the office’ directives from some major corporates, ‘office-only’ workstyles were expected to be used by just 10% of those surveyed.
- 46% expected to follow a hybrid workstyle, a further 22% planned to be ‘office first’, while only 7% expected to be ‘remote first’ and just 4% planned to offer a ‘work from anywhere’ arrangement.
- 33% of respondents said their biggest challenge was improving workplace utilisation, with leaders redesigning offices to support outcomes rather than presence.
“Over the next three to five years, occupiers will be compelled to make decisions in an environment marked by heightened uncertainty, transformation pressures, and evolving organisational models,” said Dr Lee Elliott, Partner and Head of Global Occupier Research at Knight Frank.
“Corporate real estate is expected to deliver more than ever. Hybrid working and office-centric models are seen by a large majority as the future of the workplace but corporates will increasingly focus on the functionality of the environment and whether it delivers for employees and teams.”
Average ANZ occupancy to stay stable
It comes as Knight Frank’s Australia and New Zealand report Q1 2025, released in April, found 25% of respondents had a return to office mandate in place, while a further 29% said they strongly agreed with a return to office mandate or had unofficial guidelines.
Despite the majority of occupiers favouring a return-to-work policy, the research found the majority of respondents intended to keep their average office occupancy stable over the next three years, while 42% said it would increase and 13% indicated it would decrease.
“Flexibility and resilience are vital for decision-makers in the current climate,” said Knight Frank Partner and Global Head of Occupier Strategy and Solutions Tim Armstrong.
“Corporates are committing to new space but building in flexible lease terms and options on pre-lets to remain nimble, while also looking to regionalise their footprint to embed a strong regional presence, stay relevant to local markets and reduce exposure to geo-political risks.”
Knight Frank is a CCIWA Corporate Member. For more on the reports visit knightfrank.com.au.
