The cost of half-empty offices

New Zealand businesses may be spending far more than necessary on office space that isn’t being fully used. Hybrid working has become the norm nationwide, with 93% of organisations supporting flexible arrangements and employees averaging 3.3 days a week in the office. About a third of workers now spend at least some of their time working from home.

Despite this shift, office utilisation remains relatively low. On average, workplaces are only used about 64% of the working week, leaving large portions of space empty on any given day.

“For businesses, that gap comes at a significant cost”, Gaze Commercial workplace strategist Steffan Wiliams says.

“The average workspace is estimated to cost around $10,800 a year in rent, operating expenses and fit-out. Better aligning space with actual use could save a 125-person company around $270,000 annually.”

Wiliams argues the problem is not a lack of demand for office space, but rather a lack of insight into how it is actually used. “Most organisations don’t have a clear understanding of how their space is actually being used. It’s one of their biggest costs, but one of the least understood.”

To tackle this, Gaze Commercial has introduced Gaze Workplace Intelligence, a data-driven advisory service aimed at helping organisations better understand and optimise their office usage.

Globally, many organisations are already adopting real-time utilisation tracking and predictive analytics to refine their office footprints, improve efficiency, and inform workplace design. In contrast, adoption in New Zealand is still in its early stages.

“That shift is well underway offshore, but in New Zealand it’s only just beginning,” he says.

The approach combines occupancy sensors with AI-powered analysis to deliver real-time insights, along with forecasting tools that help guide lease decisions and workplace design.

Wiliams says many New Zealand businesses are making long-term property decisions without solid data. “That creates risk – not just in cost, but in how effectively the workplace supports the business.”

Hybrid working has made these inefficiencies more visible, with office attendance varying widely between teams and across the week.

“While many workplaces were designed for a five-day, peak attendance now occurs midweek, while large parts of the office sit empty, while others are over capacity.”

Even so, many organisations still rely on assumptions, informal observations, or outdated benchmarks when making decisions about leases, redesigns and long-term investments.

“This isn’t about monitoring people, it’s about businesses understanding one of their biggest costs,” Wiliams says.

As cost pressures persist and many companies face key lease decisions in the next 12 to 24 months, he says data-driven decision-making is becoming critical to both financial and operational strategy.

“As hybrid working becomes a permanent feature of the New Zealand workplace, businesses need to ensure their office is fit for purpose and delivering value in line with one of their largest ongoing investments.”

Globally, hybrid working is now the dominant model, with around two-thirds of organisations having formalised structured hybrid policies.