In commercial real estate, 1 m² in 2 is unoccupied during peak hours

In a context of profound changes in uses, marked by the hybridization of work organization methods, ESG pressure and new expectations of companies, Knight Frank and Z#BRE are combining their expertise to highlight a key indicator that has been ignored until now: actual office occupancy.

The finding is clear: in many commercial buildings, some spaces are only 50% occupied during peak hours, without this appearing in traditional asset performance indicators. This invisible vacancy unnecessarily increases operating costs and carbon emissions, without any use value in return.

A contractual occupation, but an off-the-radar vacancy

The widespread adoption of hybrid work has blurred the traditional benchmarks of the tertiary market. The actual occupancy rate of spaces is detached from the signing of the lease: entire floors can remain empty on certain days of the week, while continuing to generate rent, charges, etc., and degrading the environmental footprint.

Faced with this distortion between the physical reality of occupation and contractual commitments, Knight Frank and Z#BRE propose a new approach, based on the objective measurement of uses using data from the field.

A new unit of measurement: the euro per m² activated

Rather than thinking solely in terms of rented space, the two players propose introducing a new metric: the euro per square meter actually used. This measure combines rental yield with the effective utilization rate of the space, thus revealing the real performance – economic, energy, and social – of a real estate asset and its sources of optimization.

For Magali Marton, Director of Studies & Research at Knight Frank: "Two buildings with the same rental yield can have very different performances depending on their actual occupancy rate. Usage-based management then becomes a value creation criterion in its own right, both for its occupant in a logic of optimizing its financial costs and its ESG policy, and for its investor owner through a better understanding of the usage dynamics of the buildings owned."

100.000 m² analyzed: up to €6 million in annual savings

This new approach has been deployed on a large scale by a major transport player across all of its offices in France (100.000 m² in total, including a 25.000 m² headquarters). Thanks to the installation of 3.500 connected sensors, the company was able to continuously measure the attendance, flows, and actual uses of its spaces.

The results are edifying:

• 42% average occupancy rate observed;
• Up to 28% reduction in energy consumption (heating, ventilation, air conditioning);
• 5 to 6 million euros in annual savings;
• 30% of rationalized surfaces;
• A management tool now integrated into the executive committee.

A strategic tool for investors and users

The technology developed by Z#BRE, which combines smart sensors and artificial intelligence, allows investors and occupying companies to classify their buildings into three categories:

• Opportunity: buildings can be optimized without work and therefore heavy Capex;
• Alert: underperforming assets to be reinvented or transformed;
• Resilience: efficient and stable buildings.

For Nicolas Vauguier, Director of Partnerships at Z#BRE: "Office real estate isn't lacking square meters, it's lacking clarity. By revealing actual usage, we transform these dormant square meters into valuable sources. Occupancy intensity will soon become a benchmark as strategic as the vacancy rate."

Towards real estate driven by data and sobriety

This new vision of real estate performance draws direct inspiration from the retail sector, where every square meter is analyzed based on customer traffic. Applied to offices, this approach transforms spaces into living real estate assets, managed in real time according to organizations' needs, promoting more agile, more economical management, and better aligned with companies' CSR challenges.

Illustrative image of the article via Depositphotos.com.