The vast majority of tenants (92%) expect their employees will return to the office in summer at the latest and 41% expect to keep their team unchanged, while 17% estimate growth in staff numbers.
A quarter of office tenants expect to resume activity in the office in May, while 67% believe they would return in summer.
Around 55% of office tenants said their business has been negatively impacted by the pandemic, especially in the medical sector, retail and open space offices. Just 16% said their activity has not been affected so far and 6% reported positive impact on their business.
“Most tenants are affected by drops in revenue or having been forced to postpone or cancel expansion plans, while some face difficulty on the supply chain. While 84% of tenants said their teams are currently working from home, returning to the office as soon as possible will be the first step towards recovery. However, there is a heavy dose of uncertainty and the situation could change at any moment,” said Sebastian Dragomir, Partner and Head of Office Advisory at Colliers International.
In terms of rent levels, 70% of tenants polled by Colliers International expect office rents will decrease due to the pandemic and 23% of these expect a significant price drop. Another 20% don’t expect any change in rent levels and none of the tenants expect the price to increase.
On the other hand, 45% of office building owners expect rent levels will stagnate, while 30% expect they will have to lower rents until the end of this year or the end of the first quarter of 2021 at the latest.
Over 50% of office owners said they are affected by the pandemic and 39% expect the office vacancy rate to increase in the next 12-15 months, while 35% are more optimistic and expect stable occupancy rates.
“The office market is expected to recover starting 2021, as market players expect this to be a V-shaped crisis. In other words, things will get worse in the next period but will start to improve in the next 9 months driven by high confidence levels in the evolution of the local market. 44% of owners and 52% of tenants thinks they will return to their pre-crisis business level starting 2021. Over one third of owners and tenants are optimistic and except a recovery as early as the second half of this year but it all depends on the evolution of the pandemic and the time when tenants will be able to return to the office,” said Dragomir.