Half empty offices are costing businesses big bucks
Tuesday, 28 April 2026
A big proportion of New Zealand’s office space is sitting empty on any given day, with businesses operating at about 64% utilisation across a typical week, a workplace design expert says.
And that means many businesses are paying for office space that is not being fully used.
Gaze Commercial workplace strategist Steffan Wiliams said hybrid working was now the norm for many workplaces, and office attendance rates had settled at a certain level.
“While there is supposedly a drive - in New Zealand and globally - to get more people back into the office, that’s more a perception than a reality.”
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A CBRE survey last year revealed there was some regional divergence in office attendance rates, and that attendance was lagging leader expectations, particularly in the public sector, he said.
Of the three main urban centres, Christchurch had the highest attendance level at an average of 3.8 days a week. Auckland’s was at an average of 3.1 days, while Wellington’s was lowest at 3 days.
With 64% utilisation of office space the average, that was 36% of space not used for most of the week, and for businesses that gap came at a significant cost, he said.
“Businesses should calculate what their costs are, but the average workspace is estimated to cost around $10,800 a year based on office provision of 10m² per person in rent, operating expenses and fit-out.
“If a business better aligned its workspace with its actual use, and reduced space to perhaps 80% of the current capacity, it could save a 125-person company about $270,000 annually”.
Wiliams, who has worked in workplace design for 30 years, mainly for large corporates in the UK, said companies tended to treat workspace costs as overheads they could not change.
That meant they did not measure utilisation of workspace because they felt it was pointless, he said.
“So while businesses should have a clear understanding of their workspace costs, many don’t, and it means they are making long-term property decisions without reliable data.
“That creates risk – not just in cost, but in how effectively the workplace supports the business.”
But workspace costs were not an overhead, they were a daily cost that should be reviewed regularly as there were options to reduce the amount of unused space and the associated costs, he said.
“Going into a lease renewal with an accurate understanding of how much space they need allows a business to renegotiate the lease accordingly, or get a new lease somewhere else.
“If they are mid-lease, they can use the information to sub-let, and maximise use of space, but it’s not just about getting the right size.
“Keeping tabs on utilisation can help more accurately predict how many people a workspace can accommodate going forward, and how to develop it for different team and employee needs.”
Wiliams said that internationally businesses were increasingly using real-time utilisation data and predictive modelling to reduce footprint, improve performance and design workplaces.
In New Zealand uptake of the monitoring technology and expertise remained limited, he said.
“That’s partly because the international firms offering the service are quite expensive and prefer to work with larger companies.
Gaze had developed a workplace advisory for the New Zealand market using sensor-based occupancy data with AI-enabled analysis to provide insights into workspace use.
The sensors measure space and whether it is occupied, not people.
With cost pressures weighing on businesses, the ability to make evidence-based property decisions was becoming an increasingly important part of financial and operational strategy, Williams said.
“As hybrid working becomes a permanent feature of the workplace, businesses need to ensure their office is fit for purpose and delivering value in line with one of their largest ongoing investments.”