Europe’s large corporate occupiers are signalling a significant shift in their approach to office space, expressing a strong desire for higher quality, more functional, and flexible workplaces over the next three years, yet simultaneously demonstrating a growing reluctance to absorb the premium costs associated with such premium environments. A recent landmark survey by global real estate services firm CBRE reveals that nearly two-thirds of these major European firms, representing 65 percent of respondents, are actively planning to relocate some of their operations within this timeframe. This strategic repositioning is driven by an evolving understanding of the workplace’s role in attracting talent, fostering innovation, and enhancing employee experience, even as economic pressures and evolving operational needs prompt a more stringent evaluation of real estate expenditures.
The findings, detailed in CBRE’s 2026 European Office Occupier Sentiment Survey, paint a complex picture of a market in transition. The survey, which gathered insights from over 90 prominent European office occupiers, highlights a pronounced divergence between desired office attributes and the willingness to financially commit to them. While an overwhelming nine in ten respondents indicated they would outright reject office spaces that fail to meet their specific amenity requirements, the proportion of these firms willing to incur additional costs for superior facilities has seen a notable decline. This figure has fallen from 54 percent in the previous year to a more cautious 48 percent, underscoring a heightened sensitivity to rental yields and operational overheads among large businesses.
The Evolving Demands of the Modern Workplace
This tension between aspiration and affordability is fundamentally reshaping the types of workplaces organisations are actively seeking. The traditional office model is being challenged by a growing demand for adaptable and multi-functional spaces. Almost half of the surveyed occupiers (48 percent) anticipate a greater need for areas that can be easily reconfigured to suit diverse operational requirements and project types. This reflects a move towards more dynamic work settings that can accommodate a variety of activities, from collaborative team sessions to focused individual work.
Furthermore, the accelerating integration of advanced technologies is creating new demands for specialised facilities. A substantial 43 percent of respondents foresee an increased requirement for bespoke environments such as dedicated AI laboratories. This indicates a recognition of the need for physical spaces that can support the development, testing, and deployment of cutting-edge technologies, particularly artificial intelligence, which is poised to transform business operations across sectors. Concurrently, 38 percent of organisations expect to expand their utilization of flexible workspace solutions. This trend suggests a growing preference for agile leasing models that offer scalability and cost-efficiency, allowing businesses to adapt their footprint in response to fluctuating needs without long-term capital commitments.
Artificial Intelligence: A Double-Edged Sword for Office Space
The pervasive influence of artificial intelligence (AI) is emerging as a significant, albeit complex, factor in shaping future office requirements. While a majority of respondents, just over half, believe that AI will eventually lead to a reduction in both overall headcount and the physical space required by their organisations, its impact is likely to be multifaceted. The automation of routine tasks and the enhancement of operational efficiencies through AI could indeed streamline workforce needs. However, the same technological advancements may simultaneously drive an increased demand for more specialised and sophisticated workplaces. As the nature of jobs evolves, with a greater emphasis on creative problem-solving, strategic oversight, and complex data analysis, the activities performed within offices will change. This shift could necessitate the creation of environments that foster these higher-order cognitive functions, potentially leading to a demand for more purpose-built spaces rather than generic office layouts. The strategic integration of AI might, therefore, paradoxically increase the need for high-quality, technologically equipped, and adaptable office stock, even as it aims to optimise resource utilisation.
Sustainability: A Non-Negotiable Imperative
Beyond technological and functional considerations, sustainability continues to be a critical driver of property decisions for large European firms. The commitment to environmental responsibility is deepening, with a significant increase in the number of companies targeting net-zero emissions by 2030. The survey indicates that 45 percent of respondents have set this ambitious goal, a notable rise from 37 percent in 2024. This escalating focus on environmental, social, and governance (ESG) criteria means that the energy efficiency, carbon footprint, and overall sustainability credentials of office buildings are becoming paramount. Firms are increasingly scrutinizing their supply chains and operational impacts, with their real estate portfolios being a key area for improvement. This will undoubtedly place further pressure on landlords to invest in greener building technologies and practices to attract and retain environmentally conscious tenants.
A Tightening Market for Premium Space
The convergence of these evolving demands – for higher quality, flexibility, specialised facilities, and sustainability – is occurring against a backdrop of potentially tightening supply for suitable office stock. CBRE’s analysis forecasts a significant decrease in the proportion of modern office buildings within the European market. By 2028, buildings less than five years old are projected to constitute a mere 6.8 percent of the total European office stock. This represents the lowest percentage observed in over a decade, suggesting a diminishing availability of contemporary, high-specification, and energy-efficient workspaces.
Adding to this dynamic is the burgeoning demand from the technology sector, particularly AI-focused businesses. These companies, which currently account for approximately 3 percent of European office take-up, consistently favour prime, high-quality buildings situated in central, accessible locations. This concentration of demand from a rapidly expanding industry further intensifies competition for the limited supply of desirable office spaces.
Anna Esteban, CBRE’s Head of Leasing and Occupier Accounts for Europe, articulated this sentiment by stating, "Organisations may ultimately occupy less space, but they will be more selective about what they retain, particularly as they seek workplaces that can attract employees and offer a better experience." This strategic consolidation and heightened selectivity underscore a fundamental shift in how companies perceive and utilize their office footprint. The office is no longer merely a cost center but a strategic asset for talent acquisition and retention.
The Role of Flexible Workspace and Future Market Dynamics
In response to these evolving market conditions, CBRE anticipates a concurrent increase in the adoption of flexible workspace solutions. This trend is expected to empower organisations to access premium office environments without the substantial upfront capital expenditure traditionally associated with long-term leases. Flexible workspace providers can offer agility and reduce the burden of lease liabilities, aligning with the cost-conscious yet quality-seeking approach of many large occupiers.
However, Mark Cartlich, CBRE’s Head of European Occupational Market Research, warns of potential challenges. He notes that "the trends risk creating a mismatch between the offices organisations increasingly want and the stock available to them, potentially intensifying competition for prime space." This projected mismatch could lead to significant price escalations for the most desirable, modern, and well-located office assets. Landlords who have invested in upgrading their properties to meet the new demands of occupiers are likely to command premium rents, while those with older, less adaptable stock may face challenges in attracting and retaining tenants.
Broader Implications and Market Outlook
The implications of these trends are far-reaching for both occupiers and landlords across the European office market. For occupiers, a proactive and strategic approach to space planning will be crucial. This involves a thorough assessment of future needs, the integration of technology, and a clear understanding of sustainability goals. Businesses that fail to adapt may find themselves in a competitive disadvantage, struggling to attract talent or maintain operational efficiency.
For landlords and developers, the imperative is to invest in upgrading existing portfolios and developing new stock that meets the stringent criteria of modern occupiers. This includes a focus on sustainability, technological integration, flexible design, and the creation of amenity-rich environments that promote employee well-being and collaboration. The shrinking supply of modern buildings suggests that those that can deliver on these fronts will be well-positioned to benefit from increased demand and potentially higher rental yields.
The survey’s findings, while based on a sample of major occupiers, serve as a crucial indicator of sentiment and emerging trends within the broader European office market. The next few years are likely to witness a significant realignment of priorities, with a clear emphasis on quality, functionality, and sustainability, all while navigating the persistent pressure to manage real estate costs effectively. The ability of the market to respond to these complex and often competing demands will determine its future trajectory and the evolution of urban working environments.
