Occupancy and space planning

Occupancy planning is the strategic discipline of matching workforce space demand to real estate supply by analyzing data on headcount, utilization patterns, and work styles.

In China’s rapidly evolving hybrid work environment, it is critical because traditional static allocation models fail to capture the significant day-of-week volatility in office attendance. By shifting from periodic audits to continuous data-driven management, organizations can avoid billions in wasted costs from underutilized assets and align their portfolio with actual business needs rather than historical assumptions.

Occupancy measures how many people are assigned to a space (capacity allocation), while utilization measures how much of that space is actively used at a given time. In the Chinese market, where high headcount assignments often mask low actual presence, this distinction is vital. Leading organizations now integrate sensor data, badge swipes, and WiFi analytics to filter out "passive occupancy" (e.g., bags left on desks), revealing that actual utilization often hovers around 50% despite high assignment rates. This accurate measurement uncovers the true optimization opportunity hidden in seemingly "full" offices.

Portfolio optimization has surpassed simple cost reduction as the top priority for CRE leaders in China. Key focuses include:

• Using actual utilization data to decide which locations to retain, consolidate, or exit;
• Improving data quality to support evidence-based decision-making;
• Accelerating seat-sharing models to increase density without compromising experience; and
• Integrating sustainability targets into portfolio strategy to meet strict ESG compliance requirements.

The goal is to create a right-sized, high-quality portfolio that supports hybrid work flexibility.

Most organizations in China are paying for nearly twice the office space their workforce actively uses. With average utilization rates often below 60%, the financial exposure is significant: a large portfolio can incur millions of RMB in annual excess costs for rent, property management fees, and utilities for empty spaces. Beyond direct rent, this includes unavoidable operational costs for HVAC, lighting, and cleaning that do not scale down linearly with lower occupancy, tying up capital that could be better invested in core business growth or technology upgrades.

Underutilized office space is a major driver of unnecessary carbon emissions, directly conflicting with China’s "Dual Carbon" goals. Operating half-empty buildings at full HVAC and lighting capacity wastes 20–25% of energy consumption. By using occupancy data to implement demand-controlled ventilation and lighting, organizations can significantly reduce their energy intensity. Furthermore, consolidating underutilized floors or buildings eliminates the embedded and operational carbon of those spaces entirely, providing a measurable and immediate contribution to Scope 1 and 2 emission reduction targets required for ESG reporting.