Part 1: Return to the Office Series - Predicting the Return to the Office

PART 1: RETURN TO THE OFFICE SERIES

PREDICTING THE RETURN TO THE OFFICE SEPTEMBER 2021

INTRODUCTION REPORT OBJECTIVES

Building on previous research and academic literature on the topic of the future of office, this paper is the first of a three-part, global office series that will examine the following questions: • When will businesses return to the office en masse given the ongoing COVID-19 effects? • What will be the net impact on office leasing fundamentals given the latest recession-recovery trends and remote working dynamics? • How are businesses currently utilizing their office space, how are they designing for the post-pandemic future, and how will that vary by industry, geography and job function?

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INTRODUCTION

GLOBAL AMERICAS APAC EMEA

Vaccination rates have been a cause of increased optimism and consumer activity throughout 2021. While vaccines are less effective in combating the Delta variant, they still reduce risk of infection by 66% (down from 91% when combating the pre-Delta strain of COVID-19) according to the Centers for Disease Control and Prevention (CDC). 2 Given the combination of vaccination effectiveness and the speed with which the Delta variant appears to peak and then recede, these two pieces of information—the vaccination data in combination with certain countries where Delta has previously peaked— can serve as possible “leading indicators.” Utilizing these as a guide, as well as other data, we have constructed possible and probable return-to-office scenarios for the Americas, Asia Pacific (APAC) and Europe (EMEA).

The primary objective of the first report in our series is to use the data and information available to us at this time (i.e., mid-September) to forecast when most employees will return to the office. One of the key variables in predicting the return to the office is the trajectory of the virus itself. Clearly the situation remains fluid as the Delta variant of the COVID-19 virus continues to spread throughout the world. That said, there are also clear indications that the world is making significant progress towards achieving herd resiliency, and there are certain countries, such as India and France, where the Delta variant appears to have peaked and the situation is improving. In analyzing data from the World Health Organization, the virus surged in both countries for 6-8 weeks before trending downward. 1 Likewise, in the U.S., there are many states, such as California and Louisiana, where the pandemic curve appears to be bending in September right around the two-month-mark. These and other locations may offer some insight as to what is in store for the rest of the world, and so we take them into consideration in forming our analysis.

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ASSUMPTIONS & METHODOLOGY

Our thesis in predicting the return to the office is predicated on the following assumptions: • The Delta strain represents the final wave of the pandemic; no major virus setbacks from this point forward (or at least not with the same virulence) and the vaccines maintain their effectiveness, potentially requiring a booster shot. • COVID-19 projections are reasonably accurate and that when new daily infections reach low levels for a sustained period, they will correlate with a gradual return to the office. We rely on the Institute for Health Metrics and Evaluation (IHME), an independent health research center, for COVID-19 projections. • Current vaccination programs will continue at pace, and herd resiliency forecasts will be reasonably accurate. According to most public health experts, at least 70% of the population will need to be either infected or vaccinated to achieve herd resiliency. • Full, in-person school learning will return to percentages resembling the pre- pandemic norm and will be sustained after herd resiliency has been achieved.

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GLOBAL AMERICAS APAC EMEA

This report is structured with an analysis of global trends followed by detailed regional sections for the Americas (U.S. and Canada), APAC and EMEA. Each global region’s section includes the following: • First, we review the “current state” of the region, which examines the percentage of office employees that have already returned to the office as well as the latest thoughts on return to office plans. • Second, we study the trajectory of the virus and IHME forecasts based on observations in several case study countries, as well as the trajectory of vaccination and expected timelines for achieving herd resiliency. • Lastly, we present forecast scenarios for when businesses may return to the office.

In addition to these assumptions, we recognize other important factors will contribute to the full return to the office. For instance, confidence in mass transit will be a factor for many markets. Government policies and procedures will also be a factor. There are a myriad of other factors, including childcare issues and assumptions regarding labor force participation returning to pre-pandemic levels. In this analysis, we presume that if the previously listed assumptions are met, then most of the other issues will resolve in short order so as not to delay the return to the office in a meaningful way.

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GLOBAL OVERVIEW

As of September 2021, approximately 40% of all global office workers have returned to the office. China is leading the return with over 90% back. All other regions of the world examined in this study fall in a range between 27% and 40% of employees in the office on any given day.

BACK AT THE OFFICE SNAPSHOT Percent of Employees In the Office, September 2021

100

96

80

60

40

40

34

32

27

20

0

Greater China

Europe

U.S.

Asia Pacific (ex. China)

Canada

Source: Kastle Systems for U.S.; Cushman & Wakefield Research’s interpolation of Google Mobility Data

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GLOBAL AMERICAS APAC EMEA

The latest COVID-19 projections indicate that global infections related to the Delta variant will peak in October or November 2021 and then trend lower. This is consistent with the pattern that COVID-19 has displayed throughout the pandemic—new cases often surge for two months before trending back downwards.

AVERAGE NEW DAILY INFECTIONS FORECAST Worldwide, Millions (Data as of September 10, 2021)

4 6 8 10 12 14 16 18

Millions

0 2

New Daily Infections

Baseline

Upside

Downside

Source: IHME *Estimates include confirmed infections and estimates of those not tested.

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GLOBAL OVERVIEW

At the current rate, most of the world will achieve herd resiliency—i.e., over 70% either vaccinated or infected—by Q2 2022. Herd resiliency will be achieved first in Canada (Q3 2021), followed by the U.S., Europe and China all in Q4 2021. The rest of Asia Pacific will vary by country, but as a region overall, it is likely to lag behind by a quarter or two (Q1 or Q2 2022). Given the impact on working parents, in-person school is a critical factor for predicting a fuller return to the office. In the U.S., for example, just over 24 million households have at least one child under the age of 12, which accounts for about 20% of the workforce.

VACCINE TRACKER & FORECAST Percentage of Population Fully Vaccinated, Actual & Forecast

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

20Q3 20Q4 21Q1

21Q2 21Q3 21Q4 22Q1

22Q2 22Q3 22Q4 23Q1

23Q2

World

World forecast

U.S.

U.S. forecast

China

China forecast

EU

EU forecast

Source: Our World in Data; World Bank; Moody’s Analytics

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GLOBAL AMERICAS APAC EMEA

Government guidelines will also play a critical role in boosting worker confidence and encouraging a return to the office. According to Oxford University, government stringency still varies substantially with locations like New Zealand and Canada currently with high levels of restrictions, while the UK, South Korea and the Netherlands are considerably more open. 3

In our study, if our assumptions hold true, we conclude that most office workers globally will be able to return to the office in the first quarter of 2022. Regionally, the return will be led by Greater China, followed by Europe, then the U.S., Canada and finally the Asia Pacific region. Again, timing will vary within countries.

FEBRUARY 2022 TRACKING AS INFLECTION POINT Worldwide

0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000

20 30 40 50 60 70 80

Herd resiliency > 70%

Virus down to low levels

0 10

Apr-21

May-21

Jun-21

Jul-21

Aug-21

Sep-21

Oct-21

Nov-21

Dec-21

Jan-22 Feb-22

New Infections (Avg. Weekly Cases)

Herd Resiliency (% Vaccinated or Infected), rhs

Source: IHME; Our World in Data; World Bank; Moody’s Analytics

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UNITED STATES

CURRENT STATE Who’s currently at the office? In the first week of April 2020, as the first wave of COVID-19 began impacting the U.S., office utilization dropped to under one-fifth of its previous norms. Since then, employee in-office attendance has followed a logical pathway—that is, steadily increasing when new infections fell to lower levels, decreasing when new infections spiked. The vaccination programs started in December 2020 but became more readily available to the general public in March and April 2021. As vaccination rates increased, employees began to return to the office in larger numbers. Employee occupancy hit a peak of 35% in late July but receded slightly as the Delta variant spread in August. 4 As of September 15, 2021, employee in-office attendance sits at an average of 34% across 10 markets 5 tracked by Kastle Access Control Systems. Employees are coming back to the office to a greater degree in markets that are less dense and where government regulations have been more limited. For example, three Texas cities are at or above 40%, while San Francisco is at half of that at 21%.

AMERICAS

GLOBAL AMERICAS APAC EMEA

PERCENT OF EMPLOYEES BACK IN THE OFFICE – U.S. Metro Comparison, as of September 15, 2021

Metro

10-City Average

50%

40%

30%

20%

10%

0%

Austin

Dallas

Houston Philadelphia Washington, DC

Los Angeles Chicago New York San Jose San Francisco

Source: Kastle Access Control System data. Data from September 15, 2021.

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AMERICAS: U.S.

WHAT’S THE CURRENT PLAN? For the second year in a row, consensus began to swell around a post-Labor Day (September 6) surge back to the office. But the Delta variant quickly ended that optimism. In the last few weeks, a growing list of companies have delayed their return-to-work policies. Some have planned minimal delays, as short as one month, targeting October. Many other companies have pushed their timelines out, targeting January 2022. For example, banking and financial firms mostly fall into the first category, many of them making news in 2021, publicly stating a commitment to in-office work post-pandemic. These institutions have almost unilaterally been communicating a shorter delay and are expecting to resume frequent in- office work in Q4 of this year. Law firms, another sector that greatly impacts many Central Business Districts (CBDs), were largely targeting Labor Day but many have pushed return to office to Q4. Technology firms are all over the spectrum on expected return dates. However, they are the most likely to be targeting early-2022.

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GLOBAL AMERICAS APAC EMEA

NEARLY 40%

of people expect to return to the office immediately after herd immunity is reached. Two-thirds will be back within three months.

EXPECTED RETURN TO OFFICE (U.S.) After Heard Immunity, How Long to Return to the Office?

40%

30%

20%

10%

0%

Immediately

1-30 Days

2-3 Months

4-6 Months

7-11 Months A Year or Longer

Never Again

Source: The Harris Poll. https://theharrispoll.com/wp-content/uploads/2021/09/Data-Tables-Wave-80.pdf

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AMERICAS: U.S.

THE STATE OF VACCINATION MANDATES Organizations have grown more willing to mandate employees to be vaccinated. According to Barron’s, one-fourth of the 30 companies that comprise the Dow Jones Industrial Index have mandated vaccines for workers. 6 This is in line with Cushman & Wakefield Research’s broader tracking of 130 larger companies, among which 32% had mandated vaccines for employees as of mid-September. Additionally, 30% of respondents to an August 2021 CoreNet Global survey say their companies will require vaccinations before employees can return to work. 7 These surveys were all conducted prior to President Biden’s announcement on September 9, 2021 that companies with more than 100 employees need to mandate that their workers get vaccinated or face weekly testing, which is likely to push vaccination rates higher. Moreover, company mandates are likely to continue to increase now that one of the vaccines was granted full approval by the U.S. Food and Drug Administration (FDA) on August 23, 2021. 8 The other two vaccines are in process and could receive full approval this fall. Many unvaccinated individuals also have indicated that they would be more inclined to get a vaccine once it is fully approved, 9 which could push up vaccination rates regardless of employer pressure.

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GLOBAL AMERICAS APAC EMEA

OUTLOOK – U.S. VIRUS UPDATE:

Concerns exist related to the growth of the Delta variant and its path. Although new infections and hospitalizations remain elevated, it appears that U.S. cases may have peaked in early September 2021. Patterns in countries where Delta has already spread and seemingly peaked—namely France and India—may indicate the trajectory in the U.S. In those two countries, cases grew significantly for six to eight weeks before falling quickly from their peaks. These patterns are fairly consistent with IHME COVID-19 projections. In IHME’s baseline scenario, new infections in the U.S. will peak in late-August or early September and begin trending downwards. Based on these trends, we estimate that new infections will be back lower, pre-Delta levels by December of 2021.

AVERAGE NEW DAILY INFECTIONS FORECAST United States (Data as of September 10, 2021)

- 100 200 300 400 500 600 700 800 900

Thousands

12/10/2020

2/10/2021

4/10/2021

6/10/2021

8/10/2021

10/10/2021

12/10/2021

New Infections

Baseline

Upside

Downside

Source: IHME, Cushman & Wakefield Research; *Estimates include confirmed infections and estimates of those not tested.

15

AMERICAS: U.S.

VACCINE UPDATE As of early September 2021, just over 200 million Americans—that’s slightly more than 62%—have been fully or partially vaccinated. A total of 378 million vaccine doses have been administered. If the U.S. continues to average 700,000 to 800,000 doses per day as it has been in September, herd resiliency will be achieved sometime in the fourth quarter of 2021. RETURN TO THE OFFICE FORECAST Best Guess: January/February 2022 – Even before the surge in remote work due to the pandemic, office space was not 100% occupied by employees at any given time. Cushman & Wakefield’s Total Workplace consulting data indicates that approximately 60% of desks were utilized on an average day in the U.S. prior to the pandemic. Taking several factors into account (including the ones shown in the visual to the right,) we forecast that the return to office will pick up strongly in early 2022.

16

GLOBAL AMERICAS APAC EMEA

BACK TO THE OFFICE TRACKER – UNITED STATES

GOAL

VIRUS VACCINE SCHOOLS GOVERNMENT

September 2021

December 2021 (forecast)

17

CANADA

CURRENT STATE Who’s currently at the office? Approximately a third of Canadians are in the office on any given workday, with a national average that is roughly equivalent to U.S. levels. Mobility data shows a correlation between geography and return-to-office activity—less restrictive Western cities are indicating higher levels of office activity compared to very low levels in Ontario. Recent data released by Statistics Canada from its Labour Force Survey largely confirms the differences across regions and provinces. 10

AMERICAS

GLOBAL AMERICAS APAC EMEA

PERCENT OF EMPLOYEES BACK IN THE OFFICE – CANADA Metro Comparison, as of September 9, 2021

Metro

6-City Average

40%

30%

20%

10%

0%

Edmonton

Calgary

Vancouver

Montreal

Ottawa

Toronto

Source: Cushman & Wakefield Research’s interpolation of Google Mobility Data. Data from September 9, 2021.

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AMERICAS: CANADA

Work-from-home percentages are at or above the national average in the largest Canadian office markets. The highest levels are in Ottawa, home to the federal government. The highest earners—meaning the top 10% of the workforce—are by far the most likely to be working from home at 63% compared to just 8% for the bottom decile of the workforce. Sectors common to major downtowns—such as legal, insurance, finance and government—all have high-earning workers and have a higher proportion of employees currently working from home.

WORK FROM HOME PREVALENCE BY CANADIAN REGION April 2021

Montreal Toronto Ottawa

All Workers Vancouver Calgary

Victoria London Edmonton Kitchener-Waterloo-Barrie Halifax

Kingston-Pembroke Saskatoon St. John's Regina Winnipeg

0%

10%

20%

30%

40%

50%

Source: Statistics Canada Work From Home report, https://www150.statcan.gc.ca/n1/daily-quotidien/210804/dq210804b-eng.htm.

20

GLOBAL AMERICAS APAC EMEA

WHAT’S THE CURRENT PLAN? Canadian markets have yet to see a clear statement from major employers regarding return to work. Provincial governments, consultancies, banks, wealth management and insurers have provided few specifics on the topic. However, there are a few noteworthy exceptions. For example, a financial services firm with more than 10,000 employees in Canada has announced that their employees have the choice to not return at all. While this example is an outlier, most companies have expressed support for returning to the office though have done so without committing to a date because of changing public health guidance and uncertainty over provincial government reopening plans.

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AMERICAS: CANADA

Looming over the return to office discussion is the issue of public education. School closures have been more acute and longer in Canada than in most countries, and until there is a return of in-person schooling, a full return to office isn’t possible for many working parents. As such, we see many companies delaying a return to office decision until an expected return to the classroom in Q4 2021. In terms of employee attitudes, younger employees are expressing more interest in a return to the office. Ultimately, of course, it’s the employer’s decision, but the preferences of employees are a consideration for retention, hiring and morale. Older Canadian employees are far more likely to prefer a fully remote option—a quarter of workers over 55 years old indicate a preference for remote work, whereas only 14% of employees under 35 say they prefer a no-office option. Canadians are also less likely than Americans to say they prefer fully remote work. 11 This may reflect the differences in housing and cost of living, where many professionals in Canada occupy smaller spaces never intended to serve as a home office.

DAYS OF SCHOOL FULLY CLOSED Select Countries, March 2020-Present

Asia Europe North America

500

400

300

200

100

0

Canada United States

China

United Kingdom

Germany South Korea Singapore

France

Source: https://ourworldindata.org/grapher/school-closures-covid

22

GLOBAL AMERICAS APAC EMEA

CANADA – OUTLOOK VIRUS UPDATE

Cases peaked in April 2021, during the so-called third wave, then declined 95% to a 2021 low by mid-July. While the infection rate has increased almost 1,000% since that July trough, fatalities have remained low—several days in August recorded five or fewer deaths nationwide, far below the pre-vaccine levels. Cases vary by regions. In the Maritimes, for example, infections remain low while British Columbia, Alberta and Saskatchewan have seen surging case numbers. 12 IHME forecasts point to a large increase in cases during the remainder of 2021. Given the transmissibility of the new variant(s), even the most optimistic forecast suggests record high case counts in October or November 2021. However, if earlier patterns are repeated, case numbers could return to low levels again by early 2022 as previous waves have brought rapid increases in cases followed by an equally rapid decline.

23

AMERICAS: CANADA

AVERAGE NEW DAILY INFECTIONS FORECAST Canada (Data as of September 10, 2021)

200

175

150

125

100

75

Thousands

50

25

-

New Infections

Baseline

Upside

Downside

Source: IHME, Cushman & Wakefield Research; *Estimates include confirmed infections and estimates of those not tested

24

GLOBAL AMERICAS APAC EMEA

VACCINE UPDATE As of late August 2021, Canada has become a world leader in vaccination rates. After an initial lack of vaccine supply, Canada’s 70% rate of fully vaccinated individuals now exceeds early leaders such as Israel, the UK and the U.S. This is a remarkable turnaround. There is also minimal variation across the country as the most populous provinces

have all achieved vaccination levels of 60% or higher. 13 The four largest provinces— Alberta, British Columbia, Ontario and Quebec—account for more than 85% of the country’s population. While momentum has slowed, Canada seems on track to achieve 80%+ vaccination rates within the next two quarters.

SHARE OF POPULATION FULLY VACCINATED – CANADA Select Canadian Provinces

70%

60%

50%

40%

30%

20%

10%

0%

January 2021

February

March

April

May

June

July

August

Alberta

British Columbia

Ontario

Quebec

Source: https://health-infobase.canada.ca/covid-19/vaccination-coverage/

25

AMERICAS: CANADA

RETURN TO THE OFFICE FORECAST Best Guess: April/May 2022 – Prior to the pandemic, only 4% of employees in Canada worked remotely, according to Statistics Canada. 14 That rate has ballooned to more than 30% of the workforce and raised questions about the path for return to the office in the next several quarters. Canada has some of the world’s highest vaccination rates and, somewhat paradoxically, some of the most restrictive COVID-19 measures. Toronto, the largest city and biggest office market, just recently ended the longest indoor dining ban in the world. 15 Masks and social distancing are still required in Toronto for virtually all environments—everything from public transportation, to grocery stores, coffee shops and other retail—and vaccine passports are now being rolled out on a province-by-province basis. We foresee a slow return to office in Canada, perhaps stretching into mid-2022. It is, of course, dependent on both public health measures and schools remaining open continuously.

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GLOBAL AMERICAS APAC EMEA

BACK TO THE OFFICE TRACKER – CANADA

GOAL

VIRUS VACCINE SCHOOLS GOVERNMENT

September 2021

December 2021 (forecast)

27

ASIA PACIFIC

CURRENT STATE Undertaking an effort to predict the return to office and trying to provide an all-encompassing view is fraught with difficulty for a region as diverse as Asia Pacific. There is a raft of different experiences, government policies and cultural norms that continue to affect day-to-day living, all overlaid with the varying trajectories of virus transmission and vaccination coverage. With that context, this regional overview will be supplemented with specific market experience to highlight local variations. WHO’S CURRENTLY AT THE OFFICE? In 2020, Asia Pacific was the first region to feel the full effects of COVID-19 and was consequently the first to enter and exit an initial wave of lockdowns. In many parts of the region, things swiftly returned to normal. Data from our bespoke workplace strategy tool, Experience per Square Foot TM (XSF), shows 75% of workers in Mainland China reporting they were in the office every day or nearly every day by October 2020, while in Hong Kong it was around 69%. Both markets have trended upwards since this date.

ASIA PACIFIC

GLOBAL AMERICAS APAC EMEA

PERCENT OF EMPLOYEES BACK IN THE OFFICE – APAC Metro Comparison, as of September 9, 2021

Metro

9-City Average

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

Hong Kong SAR, China

Seoul

Mumbai

Tokyo

Jakarta

Singapore

Manila

Melbourne

Sydney

Source: Cushman & Wakefield Research’s interpolation of Google Mobility Data. Data from September 9, 2021.

29

ASIA PACIFIC

Elsewhere the return has been slower and, in 2021, hampered by the rise of the Delta variant. While recent data from the Japan Productivity Centre points to rising office attendance in Tokyo, showing daily office attendance increasing to almost 25% as of June, 16 the government continues to request firms maintain a 70% work-from-home ratio. In Singapore, the Ministry of Manpower is also still advocating that employers must ensure no more than 50% of employees who are able to work from home are at the workplace at any one point in time. 17 Similarly, government directives in Indonesia, the Philippines and Malaysia only allow for occupancy of 50% to 60%. The situation is more nuanced in Australia where Sydney and Victoria are enduring further strict lockdowns, while Brisbane and Perth remain open, but with border restrictions limiting the movement of people domestically between all states. Accordingly, office attendance is above 70% of pre- pandemic levels in Brisbane and Perth, but is currently practically zero for Sydney and Melbourne, 18 even though both reached over 50% earlier this year. Likewise, in India,

OFFICE ATTENDANCE

September 2021 vs. Pre-pandemic Levels

Brisbane attendance +70% Sydney attendance ~0%

Perth attendance +70%

Melbourne attendance ~0%

government advice varies between locations. Currently, Ahmedabad, Chennai and Pune limit office occupancy to 50%. In contrast, Mumbai, Bengaluru, Delhi and Hyderabad do not have limits on employees in the office, though current office attendance is falling well below the 100%-mark. The primary reason for the gap is access to transportation—only essential workers and those who are fully vaccinated are currently allowed on public transport.

30

GLOBAL AMERICAS APAC EMEA

WHAT’S THE CURRENT PLAN? Clearly there is no one-size-fits-all plan that has been adopted across the region. As highlighted above, markets are at very different stages in their return to work, so the timing of a fuller recovery will also vary. Markets across Greater China are largely already at full occupancy, while in North Asia, we continue to see numbers trend up. In Singapore, the situation is more reliant on governmental direction rather than employee choice, as XSF data shows that most employees would prefer to be in the What has been evidenced and corroborated around the world is that employees target dates to begin their return to office based upon external circumstances.

office most days, once the virus is under control. Given the government’s previous approach to loosening restrictions, the next step is likely to allow 75% office attendance, as previously seen in March of this year. However, the rise of the Delta variant and the Ministry’s subsequent policy tightening— disincentivizing office attendance through mandatory testing for most of the working population—suggests an increase to 75% is highly unlikely in the short term. What has been evidenced and corroborated around the world is that employees target dates to begin their return to office based upon external circumstances. In India, for example, the forthcoming festive season is expected to bring greater movement of people, which could also signal greater office attendance. In Australia, the end of the school summer holidays at the end of February in 2021 was a watershed period for greater numbers of employees to return to the office. With that and the current state of lockdowns, it is difficult to imagine any meaningful return to the office in Australia’s largest cities prior to the end of the year.

31

ASIA PACIFIC

OUTLOOK – APAC VIRUS UPDATE

Unfortunately, the virus is making a resurgence across many countries in the region. Markets in South East Asia—including Malaysia, Thailand, Vietnam and the Philippines—are experiencing high virus caseloads, averaging above 100 new daily cases per million people. Malaysia is currently above 500 new daily cases per million in population. Japan has also recently experienced a spike in cases, which appears to have peaked at over 200 new daily cases per million. Australia, South Korea and Singapore are in a narrow band, each recording around 50 new daily cases per million. However, in the instance of Australia, some states and territories are COVID-free, while New South Wales and Victoria are battling growing clusters. Following an especially large outbreak in April and May of this year, India has largely managed to contain the virus, with only around 22 new daily cases per million. On a further positive note, Greater China has all but quashed the virus with new cases totaling less than 100 cases per day in September across the total population of 1.5 billion people. A localized outbreak in Tianjin was brought under control in August and another in Xiamen is currently being managed.

32

GLOBAL AMERICAS APAC EMEA

AVERAGE NEW DAILY INFECTIONS FORECAST APAC (Data as of September 10, 2021)

14

12

10

8

6

Millions

4

2

-

New Infections

Baseline

Upside

Downside

Source: IHME, Cushman & Wakefield Research; *Estimates include confirmed infections and estimates of those not tested

33

ASIA PACIFIC

At the regional level, IHME forecasts that the Asia Pacific caseload will trend at around 950,000 per day, or around 440 per million in population. This forecast includes confirmed and unconfirmed cases, which explains the comparatively high number. The forecast is also an acknowledgement of both the current low levels of vaccination across the region and the likelihood that getting vaccinations to needed levels will require at least until the end of the year. VACCINE UPDATE For the most part, vaccination programs in Asia Pacific have lagged the rest of the world. In part, this is a reflection of the region doing well in battling the initial wave of the virus, but it also points to the difficulties in securing sufficient vaccine doses. Notwithstanding this slow start, vaccination rollout has accelerated dramatically in recent months. Over 70% of the population in Mainland China is fully vaccinated. In Singapore, the situation is even better with 77% fully vaccinated. In the remaining mature economies, full vaccination rates average between 35% and 60%, with Japan leading the pack. The overall figure for India masks the urban-rural divide, with vaccination rates much higher across major cities. Vaccinations numbers are rapidly increasing in India—more than 180 million doses were administered in August alone. In the emerging economies of South East Asia, vaccination remains comparatively low at around 15% fully vaccinated. However, it should be noted that the situation has rapidly improved in Malaysia from 3% fully vaccinated in early June to 57% in mid-September, which highlights what can be achieved when enough vaccines can be secured.

MALAYSIA MILESTONE: (full vaccinations) EARLY JUNE: 3% MID-SEPTEMBER: 57%

34

GLOBAL AMERICAS APAC EMEA

VACCINATION BY APAC LOCATION Share of Total Population Vaccinated as of September 20, 2021, Select Locations

80%

2%

5%

11% 12%

60%

6%

27%

21%

40%

77%

71%

20%

29%

57% 55%

53%

12%

42%

20%

38%

21%

6%

22%

16%

15%

11%

7%

0%

Singapore Mainland China

South Korea

Malaysia Japan Australia Hong Kong SAR, China

India Thai land Indonesia Vietnam Philippines

Fully Vaccinated First Dose

Source: Our World in Data. Data as of September 20, 2021. Percentages represent share of total population that has been vaccinated.

35

ASIA PACIFIC

RETURN TO THE OFFICE FORECAST Best guess for APAC region overall: March/April 2022 – Regional office attendance is expected to trend upwards over the next six months and forecasted to be mostly back to pre-pandemic levels in late Q1 2022 to early Q2 2022. However, the trajectory will not be uniform across the region. Markets across Greater China are already at this level, while Japan, South Korea and Singapore are likely to be next in line and reach this level towards the end of the year or in early 2022. Experience early this year in Australia suggests that workers will continue to embrace flexible working, so employee in-office occupancy may settle at a slightly lower level than before the pandemic. Following the early 2021 path, it is likely that occupancy will start to increase more meaningfully from the current levels in February 2022 as the school year begins following the summer vacation period. Timing for returning to the office in India is also likely to be around the end of Q1, reflecting the timing to achieve herd immunity. The situation is less clear in South East Asia, given the current virus caseload and that many offices remain shut down due to government lockdowns. The vaccine rollout is likely to be the leading indicator for a stronger return to office. The Philippine government is targeting 70% vaccination at the end of March 2022, which is a good proxy for other countries in the South East Asia sub-region.

36

GLOBAL AMERICAS APAC EMEA

BACK TO THE OFFICE TRACKER – APAC

GOAL

VIRUS VACCINE SCHOOLS GOVERNMENT

September 2021

December 2021 (forecast)

37

EUROPE

CURRENT STATE WHO’S CURRENTLY AT THE OFFICE?

Office occupancy has varied across key cities in Europe throughout 2021, the result of two primary factors. One, rules set by national governments and two, the guidance and expectations of individual businesses. Across the EU, the UK, and most other parts of Europe—Sweden being an exception—the approach was to mandate people work from home unless they provided critical services. Through much of 2020, people were not ‘allowed’ to go to the office in many capital and major cities. Since then, employee in- office attendance has tracked closely with the level of COVID-19 infections. Once the rules relaxed across Europe—albeit at different times for various countries—the number of people spending time in the office increased.

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EUROPE

GLOBAL AMERICAS APAC EMEA

PERCENT OF EMPLOYEES BACK IN THE OFFICE – EUROPE Metro Comparison, as of September 9, 2021

Metro

10-City Average

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

Prague Hamburg Warsaw Amsterdam Milan

Madrid Moscow Paris

London

Dublin

Source: Cushman & Wakefield Research’s interpolation of Google Mobility Data. Data from September 9, 2021.

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EUROPE

Office attendance is still artificially low because many markets continue to mandate social distancing. Prior to the most recent wave, generally, most offices were only able to operate at approximately 50% normal capacity. The second wave of COVID-19 drove occupancy levels down at the end of 2020. However, as the infection rate slowed, occupancy began increasing through September 2021. That’s when the Delta variant appeared. This third wave differed from its predecessors because of the number of people that had been fully vaccinated. The major impetus to return to the office has been the end of the traditional August holiday season and return to school. The number of London tube journeys on September 6, 2021 reached its highest level since the beginning of the pandemic. Bus journeys alike experienced a dramatic uplift, with 40% more passengers than the same time the prior week.

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GLOBAL AMERICAS APAC EMEA

WHAT’S THE CURRENT PLAN? The beginning of September has generally been cited as a date when people are being encouraged to return to working in the corporate office. Some European businesses have pushed back suggested return dates to October, however, and others to January 2022. In line with the U.S., many financial institutions are strongly encouraging return to in-person, face-to-face working from the beginning of September. A poll of more than 1,000 managers by the Chartered Management Institute in the UK found that while 80% of people were working from home in July, at least ‘some’ would be asked to return to the workplace in September. Asset managers, law firms and insurers are expecting people to be in the office for two or three days each week from the beginning of September or at some point in Q4. Currently, businesses in Europe are not mandating vaccinations. The European Convention on Human Rights (ECHR)—specifically Article 8, which protects the right to private life 19 —has been cited as a reason businesses are hesitant to require vaccinations. Article 8 is also giving employees confidence to push back on any mandates. However, the UK, France and Greece did recently mandate vaccinations for frontline healthcare workers. 20 While vaccinations remain voluntary, unvaccinated populations continue to navigate restrictions and requirements like showing a negative COVID-19 test result from the past 24 hours. In France, people can only enter cafes, restaurants, cinemas, theaters and museums with a health pass. Germany is following a similar policy by eliminating free COVID-19 tests—and thereby making access to tests a greater burden—while at the same time requiring unvaccinated people to show negative tests to access indoor spaces and events.

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EUROPE

OUTLOOK – EUROPE VIRUS UPDATE

The number of new infections across Europe has increased over the course of the last few months. The Delta variant is now the dominant variant in European countries that have provided sufficient data to be sequenced, accounting for 68% of cases compared to the previously dominant Alpha variant now present in just 22% of cases across the region. 21 Current trends indicate the Delta variant will be dominant globally for the foreseeable future, but the major difference is the number of people being hospitalized or becoming seriously ill. Since January hospitalizations have decreased as vaccination rates have increased. 22

EUROPEAN COVID-19 CASES

ALPHA VARIANT: 22%

DELTA VARIANT: 68%

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GLOBAL AMERICAS APAC EMEA

AVERAGE NEW DAILY INFECTIONS FORECAST Europe (Data as of September 10, 2021)

2,000

1,750

1,500

1,250

1,000

750

Thousands

500

250

-

New Infections

Baseline

Upside

Downside

Source: IHME, Cushman & Wakefield Research; *Estimates include confirmed infections and estimates of those not tested

43

EUROPE

VACCINE UPDATE: As of September 7, 2021, almost 50% of all people across Europe had been fully vaccinated. In the UK, France, Germany, Italy and Spain, full vaccination exceeds 60%. 23 An additional 10% have been partially vaccinated. Further, many European countries are offering the vaccination to children under 18 to increase the take up, and there are ongoing discussions about rolling out the vaccine to those between 12 and 15. 24 RETURN TO THE OFFICE FORECAST: As noted in the U.S. commentary, there has perhaps been a false assumption that offices were fully occupied prior to the COVID-19 pandemic. In truth, people had been working flexibly to varying degrees across different European countries for some time—estimates align around 60% of ‘desk usage’ at any given time. We do expect employee occupancy to continue to trend upwards from its current point as employees return as part of new hybrid working patterns. And barring a severe spike in cases we will continue to see increased numbers returning throughout the fall season and likely through the end of the year. Best guess: January 2022 – The majority of companies in Europe have indicated September or October for a concerted move back to in-office working. Those that have taken a longer view have cited January 2022 as the targeted timing. This will vary by country based on continued growth in vaccination levels, opportunity to take a third booster vaccine and by industry mix. Occupiers in the finance, banking and law sectors are more likely to be returning throughout the remainder of 2021, while technology firms (at a very generalized level) are delaying until January 2022.

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GLOBAL AMERICAS APAC EMEA

BACK TO THE OFFICE TRACKER – EUROPE

GOAL

VIRUS VACCINE SCHOOLS GOVERNMENT

September 2021

December 2021 (forecast)

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ENDNOTES

1 Cushman & Wakefield Research’s analysis of WHO average new cases data. Accessed on August 20, 2021.

2 Fowlkes A, Gaglani M, Groover K, et al. Effectiveness of COVID-19 Vaccines in Preventing SARS-CoV-2 Infection Among Frontline Workers Before and During B.1.617.2 (Delta) Variant Predominance — Eight U.S. Locations, December 2020–August 2021. MMWR Morb Mortal Wkly Rep. ePub: 24 August 2021. DOI: http://dx.doi.org/10.15585/mmwr.mm7034e4. 3 Oxford COVID-19 Government Response Tracker, Blavatnik School of Government, University of Oxford. https://ourworldindata.org/ grapher/covid-stringency-index?tab=chart

4 Kastle Access Control System

5 Austin, Chicago, Dallas, Houston, Los Angeles, New York, Philadelphia, San Francisco, San Jose, and Washington, DC

6 https://www.barrons.com/articles/companies-with-vaccine-mandates-51628878792

7 https://www.corenetglobal.org/stayinformed/newsdetail.aspx?Itemnumber=46097

8 https://www.fda.gov/news-events/press-announcements/fda-approves-first-covid-19-vaccine

9 According to an August 24, 2021 New York Times article, “Full federal approval could make vaccines more palatable to the more than 80 million people around the country who have not been vaccinated yet, Dr. Fauci said on “Morning Joe” on MSNBC, citing a survey that found that about a third of them were waiting for the F.D.A.’s imprimatur before getting a shot.” https://www.nytimes. com/2021/08/24/us/politics/fda-approval-moderna-johnson-johnson-vaccine.html. Accessed August 25, 2021. 10 Statistics Canada: Working from home during the COVID-19 pandemic, April 2020 to June 2021 https://www150.statcan.gc.ca/n1/ daily-quotidien/210804/dq210804b-eng.htm. Note: Numbers may not align because in some cases percentages are of office workers and in others percentages are of the entire workforce.

11 https://leger360.com/surveys/legers-north-american-tracker-may-31-2021/

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GLOBAL

12 IHME

13 Government of Canada, COVID-19 vaccination in Canada https://health-infobase.canada.ca/covid-19/vaccination-coverage/

AMERICAS APAC EMEA

14 This represents the proportion of the entire workforce, not just “office using” industries. Obviously, levels of work-from-home are quite low in many industries such as manufacturing, mining, construction and agriculture.

15 BBC News: “Toronto lockdown - one of the world’s longest?” https://www.bbc.com/news/world-us-canada-57079577

16 https://www.japantimes.co.jp/news/2021/07/17/business/telework-fatigue-sees-japanese-workers-going-back-office/

17 https://www.mom.gov.sg/covid-19/requirements-for-safe-management-measures

18 https://www.propertycouncil.com.au/Web/Content/Media_Release/VIC/2021/Lockdown_sets_Melbourne_CBD_revitalisation_back_months. aspx

19 https://www.euronews.com/next/2021/06/25/mandatory-covid-vaccinations-are-they-coming-to-a-european-company-near-you

20 https://www.cnbc.com/2021/08/13/unvaccinated-people-face-more-covid-restrictions-in-future.html

21 https://www.euro.who.int/en/media-centre/sections/press-releases/2021/sars-cov-2-delta-variant-now-dominant-in-much-of-european- region-efforts-must-be-reinforced-to-prevent-transmission,-warns-who-regional-office-for-europe-and-ecdc

22 https://ourworldindata.org/grapher/weekly-hospital-admissions-covid

23 https://ourworldindata.org/covid-vaccinations

24 https://www.euronews.com/next/2021/09/03/covid-vaccine-for-children-who-in-europe-is-leading-the-race

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About Cushman & Wakefield Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value by putting ideas into action for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with 50,000 employees in approximately 400 offices and 70 countries. In 2020, the firm had revenue of $7.8 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. To learn more, visit www.cushmanwakefield.com or follow on Twitter.

CONTRIBUTORS

Kevin Thorpe Chief Economist, Global Head of Research kevin.thorpe@cushwake.com

Dr. Dominic Brown Global Head of Demographic Insights, APAC-lead dominic.brown@cushwake.com

David Bitner Global Head of Capital Markets Insights david.bitner@cushwake.com

David C. Smith Global Head of Occupier Insights david.smith4@cushwake.com

Adam Jacobs, PhD Head of Canada Research adam.jacobs@cushwake.com

Andrew Phipps Head of Business Development, EMEA & Local Markets, Global Futurist andrew.phipps@cushwake.com

Rebecca Rockey Economist, Global Head of Economic Analysis & Forecasting rebecca.rockey@cushwake.com