Persistent home working is affecting office occupancy rates and is leading commercial tenants to fail to renew their office leases.

Ghost city streets have emerged post pandemic as occupancy rates hit a new low, according to a report by the Ifo Institute for Economic Research, a Munich-based research institution. One of Germany’s largest economic think-tanks said that in the UK it has been reported that office space occupancy could now be as low as 36% in some locations, compared with an average level of above 80% pre-pandemic. It added that on any given day, 12.3% of workplaces remain unused because staff are working from home.

The report stated: ‘The problem for commercial property landlords is that vacancy rates are increasing as leases expire and fail to be renewed. There are many businesses operating with a considerable amount of spare capacity, office and retail space. Many commercial tenants will either not be renewing their leases or will renew taking less space.’