Analyst Insight: Commercial Office Space in Emerging Markets

Many employers are favoring a hybrid work system and encouraging employees to return to the office, creating keen interest in agile, flexible workplaces to hedge against an unexpected crisis such as the COVID-19 pandemic. Flexible spaces allow companies to pivot to remote work or hybrid work models without being bound by long-term real estate contracts.

As a result, global demand for flexible commercial office space is increasing, but levels of occupied commercial office space are still below pre-pandemic volumes. A sense of caution in real estate investments remains because of rising inflation rates, increasing interest rates, and geopolitical climates. Labor shortages persist and companies are competing to attract and retain talent.

Attempting to differentiate themselves, landlords are providing amenities to tenants, who are increasingly requesting flexible leases and favoring short-duration commitments as they await greater clarity in business and economic conditions. Companies also want to help employees reduce their commute times and are providing alternative workstations closer to workers’ homes.

The Guidehouse Insights Global Building Stock Database estimates commercial office building stock and total building stock across more than 230 countries and building types, based on a rigorous modeling approach that uses available building stock data to fill gaps in publicly available information. An updated database was published in 3Q22.