Concerns over the health of the global economy, workforce strategies and rising cost and speed of business are heavily influencing real estate decision-making for major corporations, a new survey by CBRE Group, Inc. of global corporate real estate executives finds.
“The volatility of today’s global economy is challenging executives to align naturally long-term real estate initiatives with increasingly short-term corporate agendas,” said Karen Ellzey, executive managing director of consulting for CBRE Global Workplace Solutions. “Today’s real estate strategies have to focus on delivering ‘growth without growth’—expanding a corporation’s capabilities without spikes in capital investment or operational expense.”
More than 400 corporate real estate executives from around the world participated in the CBRE survey. Nearly half (49 percent) cited economic uncertainty as their greatest challenge, while 43 percent noted cost escalation as their greatest challenge.
Forty-eight percent projected a stable real estate footprint for this year. Seventy-nine percent stated that they are actively using space-efficiency initiatives—“saving in place”— to manage costs, combining ground-up workplace strategies with top-down cost management initiatives.
“Controlling costs and supporting employee needs are the leading goals of workplace strategies globally,” said Julie Whelan, head of Americas occupier research for CBRE. “There has been a natural shift to create workplaces that are efficient, functional and modern, allowing corporate real estate executives to balance employee desires with cost management disciplines.”
Workplace strategies are also driven by talent-centric initiatives. Fifty-five percent of survey respondents cited better collaboration as the main driver in designing and implementing workplace strategies, and 49 percent cited employee attraction and retention as a key aim.
Work-life balance is also top of mind, with executives reporting workplace flexibility, high indoor environmental quality and easy access to public transportation as features important to employees.
Global corporate executives favored emerging markets as destinations for growth, with Southeast Asia and India as top locations for expansion. Fifty-six percent of respondents indicate interest in expanding their corporate portfolios in the coming three years in Southeast Asian markets where economic opportunities are emerging.
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