(New: Quotes JLL expert Leimbach 3rd paragraph and last paragraph.)

MUNICH (dpa-AFX) - Cities worldwide must prepare for a permanent absence of many office workers. In Germany, a good quarter of employees work at home even after the end of the Corona pandemic, according to regular surveys by the Munich-based Ifo Institute; in some international metropolises, the proportion of home workers is even higher, according to the McKinsey Global Institute.

This is having an impact on the office real estate market: in Germany, new leases plummeted by 40 percent in the first half of the year, according to real estate services provider Jones Lang LaSalle (JLL). "Twenty percent is the home office effect, the other twenty percent is the effect of the economic uncertainty," says Stephan Leimbach, head of office leasing at JLL.

According to Leimbach, the second half of the year traditionally goes better than the first. "For this year, we assume that about 2.8 million square meters of office space will be newly leased, last year it was 3.6 million square meters. That would be a drop of just over 20 percent."

The home office rate in Germany has been stable at 25 percent of employees for the past year, according to Simon Krause, a home office specialist at the Ifo Institute. "We expect it to stay that way." Before the pandemic, he said, it was only 10 percent. "As a result, the number of offices vacant because of home offices has tripled. In some industries, that's about 30 to 35 percent of offices every day."

Unused office space is expensive, and in uncertain economic times, many companies opt to downsize. "My impression is that companies are downsizing by 20 percent on average," says JLL manager Leimbach.

According to Ifo expert Krause, some companies are converting vacant offices into shared spaces, for more face-to-face interaction on presence days. Others reduced their space requirements through desk sharing, for example, where several employees share a desk. "This effect is hitting the office market. But it doesn't happen immediately, but with a delay, because many companies have long-term leases."

One example: the Dax company Fresenius. The company is currently renovating its headquarters in Bad Homburg and adapting it to the new working world. According to a spokeswoman, about 40 to 50 percent of the Bad Homburg workforce works in offices every day. The company has therefore "rented out" several small office spaces in the city and is bringing employees back to the headquarters. There, 1800 employees share 1100 PC workstations. In Munich, the Allianz insurance group has given up a large location in the Neuperlach district.

One consequence of home office work is that an increasing number of companies now have fewer office workstations than employees. If the workforce one day wanted to work entirely in the company again, there would be disputes over desks.

The trend toward the shrinking office is likely to continue. The McKinsey Global Institute - part of the global management consultancy - has studied the office market in nine leading economic metropolises. The authors of the study estimate that demand for office space will fall in seven of the nine cities by 2030 - by 16 percent in Munich, by 14 percent in Shanghai and by as much as 20 percent in San Francisco.

The consequences will by no means only affect landlords, who were able to charge towering rents in the centers of major cities until the onset of the Corona pandemic. According to the Ifo Institute's analyses, some retail sales have shifted from the centers to the outskirts and suburbs.

Half-empty offices should also give mayors pause for thought, according to Ifo. "Municipalities need to consider how they can further develop city centers so that they offer an attractive mix of living, working, shopping and leisure," Krause says.

In the decades following World War II, downtowns in many major cities depopulated as their residents made way for offices. In Germany, at least the stores have been preserved in the centers. In the U.S., many "business districts" resemble deserted ghost towns after work and on weekends.

One option for preserving vibrant downtowns would be the return of a number of residents, albeit probably a rather modest number. McKinsey projects that, with the exception of Paris, downtown housing demand will increase everywhere in the nine metropolitan areas by 2030.

Companies need to plan very carefully when downsizing their offices. HR departments face a difficult task: Many employees prefer to work at home. But when they do show up at the office, they would like to be looked after there by the employer in a gentle ambience with attractive working conditions.

"The quality of the office is becoming more and more important," says Stephan Kippes, market researcher at Immobilienverband Deutschland Süd. "If I want to have good people, I have to offer them something." According to Kippes, well-equipped offices are an important factor in retaining sought-after workers in times of increasing shortages of skilled workers. "This gives a company the best chance of getting people to come back to the office and not leave right away."

But it's not just the amenities that matter, it's also the location. "It should be a place where people feel comfortable, that is easy to get to and where they can do other things in the area," says Leimbach. Conclusion: "The office has to be more than just a covered desk."/cho/DP/men