Office Over-Contraction Fuels Expansion Plans for One in Five Companies, finds CBRE Research

• Business and headcount growth remain the number one motive for expansion
• Almost half of all companies expect employees in 3+ days a week
• Pipeline of new stock is a concern for 52% of those planning office moves in the next three years

One in five (21%) companies looking to expand their office footprint are doing so as a result of over-contraction or higher than expected return to office, according to CBRE’s 2025 European Office Occupier Survey*.

This compares to just 7% in the firm’s 2024 survey, demonstrating the difficulty in providing enough space to respond to fluctuating return to office policies and subsequent compliance levels. At a UK level, downsizing has been more excessive and as a result, one in three UK companies expanding are doing so due to pandemic over contraction, or higher than expected return to office.

While over-contraction has seen the greatest year-on-year shift, companies identified business and headcount growth as the number one reason for expansion. For those downsizing, the reasons are more diverse, led by the impact of hybrid work (70%) and cost (56%).

The disparity between employers’ expectations and employee’s attendance levels continue to stall office utilisation rates, with a weekly average of 46% and a 71% peak day average. According to the research, more than half of the respondents (54%) want 3+ days of attendance, but only 42% are achieving it.

The gap is even more pronounced in the Financial Services (FS) sector, with 61% of firms wanting 3+ days of attendance, and only 32% meeting this target. As a result, 57% of FS companies expect attendance to increase further.

Across the board, companies are increasingly uncomfortable with current attendance levels, with 47% anticipating a rise in attendance, up from 31% in CBRE’s 2024 findings. The ability to create a vibrant, engaging office atmosphere was identified as the top challenge in achieving this.

Anna Esteban, Managing Director, Leasing and Occupier Accounts for Europe at CBRE said: “Quick commutes and local amenities cannot be underestimated, but the attraction strategy is a key component to success when it comes to office usage. Stronger ‘pull’ factors, that create vibrancy throughout the week must be considered alongside ‘push’ strategies in order to achieve optimum attendance levels.”

According to CBRE, the drivers behind choosing whether to stay in an existing office or move to a new one vary. Stay-go decisions are primarily driven by employee location preferences (72% renewals, 51% relocations), cost (68% renewals, 53% relocations), and sustainability (60% renewals, 58% relocations).

For those with relocation plans over the next three years, the supply of new stock is also front of mind. More than half (52%) are concerned about the availability of well-located and/or high-quality space, heightened for those in FS (63%), UK respondents (60%), Italy respondents (57%) and companies with more than 10,000+ employees (57%).

Esteban added: “The over-contraction we’ve seen in recent years only adds to pipeline pressures, as the type of office space at the top of the wish list is scarce. In turn, this makes the ‘stay’ option even more compelling, as well as close, substitute locations. Investors should be attuned to where the spillover may go.”

When asked which locations they were targeting for relocations, 47% of respondents pointed to Central Business Districts (CBD’s), with a shift away from outer ring suburbs. Nuances exist at a country level, with Spain, France, Germany, Italy and the UK putting a higher emphasis on CBDs at 67%, 64%, 62%, 62% and 55% respectively.