The COVID-19 pandemic caused a seismic shift in how commercial real estate operates. Business models that had worked without disruption for decades now were faced with a brave new world to navigate. The office sector took the brunt of the economic, social and cultural impact, as global lockdowns in March 2020 forced companies to embrace a home working model to accommodate the stay-at-home orders.
Re-defining office space: The rise of rightsizing
As many people across the country began to fashion makeshift home offices, cobbled together with kitchen tables and living room armchairs, it began to raise the inevitable question of how the office landscape would look when the doors reopened when the pandemic subsided. Prior to the pandemic and subsequent lockdowns, only 12% of employed adults worked from home at some point during the week, however during lockdown, this figure reached 49%, according to the Office for National Statistics (ONS). A sector that was defined by leases and occupancy rates had to rethink following the realisation that hybrid working wasn’t going away, with more recent ONS data noting that post-pandemic levels have remained much higher than pre-pandemic at 41%.
This led to an acceleration of the “flight to quality” and what many would’ve termed “downsizing”. In time, this has come to be known as “rightsizing” which many corporates are finding it increasingly difficult to navigate. Despite a growing movement in modern, energy efficient buildings due to ESG initiatives pre-COVID, the pandemic accelerated this trend exponentially. By late 2021 the trend became measurable, with CBRE noting that demand had now shifted towards prime office properties- as non-prime buildings begun to lag behind with higher vacancy rates and lower rent growth.
The shift to prioritising quality, often smaller office space has led to a decrease in the effective density of office space per person. The British Council for Offices (BCO) has recently revealed new research entailing that the pre-pandemic benchmark of an 80% office utilisation is no longer suitable. They suggest a new benchmark of 66% following the adaptation of hybrid working models. This implies that the effective density now sits around 15 m² per occupant as opposed to the previous 12.5 m² per occupant.
Mandates vs. Movement: Navigating the office rebound
There are now two paths forming. Companies such as JPMorgan have mandated and enforced a return-to-office (RTO) policy in May 2025. Yet research from King’s College London has found reticence from the workforce towards mandated RTO’s, with under half (42%) of workers saying they would comply with a five-day RTO – down from 54% in early 2022. In addition to this, 58% of workers now say they would either “quit immediately (9%) or start looking for a new job (49%)” if a mandated RTO was enforced.
Yet research published this week by Microsoft on the impact of its new return-to-office policy claimed that remote working has weakened social ties and impacted innovation. It goes on to suggest that employees with more in office time are “thriving”- highlighting the murky waters in which the office sector is now wading with differing viewpoints leading to a lack of cohesion and clarity.
To support their employees mandated return to the office, JPMorgan has completed a lease for 146,000 ft2 of overflow space at 1 Cabot Square in Canary Wharf. Leases like this, along with Squarepoint’s 400,000 ft2 pre-lease of 65 Gresham Street, have contributed to the UK office sector recording it’s highest take up figures since the pandemic. This was coupled with news in June 2025 that average office occupancy levels have reached post-lockdown highs according to data from Remit Consulting.
Yet down the other path, caution is still warranted. It was widely reported back in November 2023 that HSBC would be scaling down from its 1 million ft2 Canary Wharf headquarters after more than two decades. They selected 81 Newgate St in St Pauls, a building closer to 500,000 ft2, aiming to move in 2027 in what looked like a major win for the “rightsizing” movement. However, it was reported last month that HSBC were now in talks to lease as much as 180,000 square feet of office space, close to what will be its former headquarters, at 40 Bank St in Canary Wharf.
Both these paths show the margins in which operators must now function. In a new and ever-changing office landscape, clear guidance is key to maximise efficiency while still maintaining sufficient space and employee happiness.
How we can help
At Hollis, we don’t just respond to change – we shape it. With decades of experience project managing office schemes across the UK and Europe, we help clients adapt to hybrid working, ESG demands, and the latest BCO guidance. Our own recent London office move confirmed what the data shows: rightsizing isn’t just a trend-it’s a strategic advantage. By aligning space with purpose, we unlock more value from less square footage.
To learn more about the data in this piece get in touch with Jakob Wood, and to discover how we can streamline your next office project get in touch with Colin McEvoy.
