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Many Swiss no longer want to do without working from home. A survey by Blick shows that the need for office space is declining for many large companies. However, until now, there has not been a great decrease in demand in the office market in Switzerland, unlike other countries. Donato Scognamiglio, 53, who has resigned from the boss of real estate consulting firm Iazi, believes office space providers in this country still need to take up arms: “I believe the moment of truth is yet to come.”
Because in many places, employees do not return to the office even after the pandemic. “And because of the shortage of skilled workers, they have the upper hand,” says Scognamiglio. If the situation continues like this, many companies will operate in very large areas. The real estate professional also assumes this: “The home office is here permanently.”
The insurance industry narrows the fields
It is possible to see this development in the insurance industry as well. An internal survey at Axa revealed that employees still want to work in the office two days a week. This is already a reality today, as the insurance company told Blick. “This means that on weekdays buildings are largely empty and traffic is low. The insurance company writes that vacancies have neither economic nor ecological meaning for AXA.
As a result, Blick knows that Axa will sell individual office buildings in Zurich and Winterthur by 2024. In other places, the number of floor areas will be reduced. Office space in general will be reduced by 20 percent. A third of that has already been done and the remaining areas will be cleared over the next two years. Thus, the insurer frees up space in large office spaces. Currently, it uses 80,000 square meters, not counting the agencies.
The same is true for its rival, Allianz: This has already reduced office space in smaller locations. At the headquarters in Wallisellen, the area is planned to be reduced by up to 20 percent in the next one to two years. The insurance company currently uses 50,000 square meters across Switzerland.
Cost savings and new requirements
With this discount, companies can save a lot on rent. Many employers started renovating their office space even before the pandemic. Part-time work and mobile work were already on the rise before that. In addition to the savings potential through space optimization, workplace requirements have also changed.
That’s why Helsana developed a new strategy for its offices a few years ago. Helsana benefits from co-working spaces in five main locations, as well as meeting zones and quiet spaces for busy work. Last year, health insurance also started shrinking office space. By the end of 2024, the area will shrink by 15 percent.
Postfinance likes Swiss Post
Office space is also shrinking in the banking sector. Postfinance will lose another 5 percent in 2024, after a 15 percent loss in the last few years. In response, the bank opened two centrally located co-working centers in Bern and Oerlikon. In mid-July, Swiss Post announced that it would move its employees to regional headquarters. Office space will be reduced by one fifth. The group estimates the savings potential to be several million francs.
Migros has reduced its office space from 6,000 square meters to 45,000 square meters in recent years. No further discounts are planned at this time.
Quotas dropped
However, contrary to all expectations, vacancies in the office market are lower than before the corona epidemic. “This is due, among other things, to strong demand driven by increased employment,” says Raiffeisen real estate market analyst Michel Fleury (35). Sectors, especially office supplies, were still quite strong and kept demand high until recently. The slightly lower level of construction activity may have also likely dampened the impact of a larger supply.
The survey shows that some companies do not currently intend to reduce office space, or have already done so in the past: these include insurance companies Baloise and CSS, life insurers Swiss Life, or pharmaceutical companies Novartis or Roche. At Novartis this comes as no surprise. The group once again tightened the reins on the home office rule. Coop is even more strict where working from home is only possible for a maximum of one day per week. Therefore, the reduction of office space is not a problem.
creeping change
But now the economic crisis is slowly making itself felt in the market. “Companies are becoming noticeably more reluctant to rent space. At the same time, various office tenants are starting to re-enter the market,” says Fleury. This is also reflected in the rents requested, which are currently three percent below the pre-Corona level.
Office landlords face uncomfortable periods. Demand has dropped a bit lately. But the effects come on very slowly, according to the Raiffeisen real estate expert. On the one hand, this is due to the long-term planning of the companies, and on the other hand, it is due to the fact that the lease agreements are often long-term. Fleury predicts that “demand for office space will come under pressure over the next two years.” Especially around.
UBS is also expected to shake up the office space market in the next few years. Thousands of businesses and branches in Switzerland where UBS and CS are represented are under threat following the acquisition of Credit Suisse. This will significantly reduce the space requirement.
Source : Blick
I am Dawid Malan, a news reporter for 24 Instant News. I specialize in celebrity and entertainment news, writing stories that capture the attention of readers from all walks of life. My work has been featured in some of the world’s leading publications and I am passionate about delivering quality content to my readers.
