One in three UK firms looking to expand their office footprint are doing so due to an over-reduction of space and a stronger-than expected return to the workplace, according to CBRE’s 2025 European Office Occupier Sentiment Survey.

This compares with a figure of 0% in the 2024 survey, demonstrating that companies are now pivoting to take on more space after cutting back too keenly post-pandemic.

In August, HSBC, which in 2023 committed to downsizing its Canary Wharf HQ, signed for 210,000 sq ft in addition to its new smaller City base following reports of a shortage of desks.

CBRE said the survey showed that downsizing had been “more excessive” in the UK than across the continent, with the proportion of firms expanding for these reasons across Europe standing at 21%, up from 7% in 2024.

While over-contraction of office space had the greatest year-on-year shift in CBRE’s survey, business and headcount growth was still the number-one reason for expansion cited by occupiers.

For firms downsizing, the main reasons cited were hybrid working (70%) and cost (56%). Almost half of companies across Europe said they expected employees to be in the office three days or more, with office usage rates currently standing at a weekly average of 46%.

According to the report, 47% of firms expected office attendance levels to rise, with the creation of a vibrant office atmosphere identified as the biggest challenge in achieving this.

The research also found that the key drivers in whether an occupier decides to stay at or leave an existing office were varied. It found that stay-go decisions are primarily driven by employee location preferences (accounting for 72% of renewals and 51% of relocations), cost (68% renewals, 53% relocations) and sustainability (60% renewals, 58% relocations).

The research added that for occupiers looking to relocate or expand, the supply of new stock is front of mind, with 52% concerned about the availability of well-located and high-quality space, up to 60% in the UK.

Anna Esteban, managing director, leasing and occupier accounts for Europe at CBRE, said: “The over-contraction we’ve seen in recent years only adds to pipeline pressures, as the type of office space at the top of the wishlist is scarce. In turn, this makes the ‘stay’ option even more compelling. Investors should be attuned to where the spillover may go.”