April 1, 2016

Rise in European outsourcing of real estate and facilities management ⁰

by Sara Bean • Facilities management, News, Property

Companies outsourcing their real estate and facilities management needs have hit record levels across Europe, finds new data. According to CBRE, its EMEA Global Workplace Solutions (GWS) business received a record number of Requests for Information (RFI) or Requests for Proposals (RFP) from organisations wishing to outsource all, or part, of their real estate activities in 2015. This marks a 190 percent increase over 2012, with the data showing the most popular function to outsource is facilities management, with 64 percent of briefs including this service. The trend for outsourcing is also reflected in CBRE’s European Occupier Survey, which spans 120 organisations. Fifty-four percent of respondents noted that that they outsourced some or part of their property requirements. This figure marks an uplift from 30 percent the year before and demonstrates that more corporates are seeking, and using, specialist property advisors for outsourcing advice.

March 31, 2016

Government needs to wise up to the Fourth Industrial Revolution ⁰

by Mark Eltringham • Comment, Property, Public Sector, Technology

Last week, the UK Government passed the latest bill to pave the way for the creation of HS2, the high speed rail line that will initially connect London with Birmingham and later cities like Sheffield, Manchester and Leeds. Most of the criticisms of the line are focussed on its financial and environmental costs, impact on the wider rail network and (frankly poor) design. We can grant the project’s proponents all of their arguments countering those points and still we are left with a perhaps more fundamental problem. We are now committed to creating a train that will monopolise the resources available to public transport for the next twenty years and exist for more than a hundred, but without considering the world in which it will arrive. I’d go further and suggest that even as its tracks are laid, the world around it will already have left it behind, leaving it as an impressive but doomed testament to hubris, old tech and failure of imagination.

March 31, 2016

Flexible workspace underpins Hong Kong’s status as Asia’s hub ⁰

by Sean Lynch • Cities, Comment, Flexible working, Property

Despite the challenging cost of real estate and general commercial life in Hong Kong, startup activity in the city has seen exponential growth in the last few years, fuelled in part by new and innovative approaches to occupying workspace. The conventional Hong Kong office market is, famously, the most expensive of its kind – making it challenging for small and medium sized businesses to enter the market via this form of space. Despite this, the region’s startup scene is booming. According to an InvestHK survey, over 1500 startups bloomed in Hong Kong in 2015, which is a 46 percent increase compared to the previous year. And those numbers are likely to keep growing. So the question is, how do cash-strapped entrepreneurs, startups and other businesses manage to establish a base in this thriving city, despite these challenges, and what lessons does Hong Kong’s experience have for the rest of the world?

March 24, 2016

Coworking spaces not just suited to start-ups with Millennial occupants ⁰

by Sara Bean • Facilities management, Flexible working, News, Property, Workplace design

The rise in popularity of coworking spaces has been largely attributed to growing demand from creative and tech start-ups for shared workplaces that are cost-effective alternatives to traditional office leases. But there’s new evidence from the US that coworking spaces could also be eminently suitable even for larger occupiers, and especially in costly metro areas such as New York, San Francisco, Los Angeles and Boston. According to a new report from CBRE Group a number of misconceptions that have perhaps kept larger occupiers away from extensive use of coworking facilities do remain, including that this type of space is priced at a premium compared with traditional leases; that it is only utilized by entrepreneurs and small businesses; and that the users are exclusively post-college millennials. Yet CBRE’s report found that these assumptions are not accurate.

March 22, 2016

Technology firms will determine the future of real estate, claims report ⁰

by Mark Eltringham • Facilities management, News, Property, Technology

The future of real estate will be shaped by the confluence of technological and physical infrastructure, the growth of flexible working, shrinking lease lengths, a shift in focus away from location and the changing expectations of occupiers. These are the key and perhaps unsurprising conclusions of a new report from KPMG. One of the most intriguing findings of the New Foundations report is that the widespread application of data analytics and the growing number of occupiers who will use office space as a service will lead to a greater degree of collaboration between property and technology firms to offer space to clients. Although property firms may still take the lead, the report suggests that ‘serviced office models are just the beginning of this trend and specialist companies will emerge to scale up and manage these income streams. These might be joint ventures between existing property owners and technology providers.’

March 22, 2016

Manchester refurbished office market thrives due to occupier demand ⁰

by Sara Bean • Cities, Facilities management, News, Property, Workplace design

Approximately 625,000 sq ft (58,063 sq m) of office space in Manchester is set to be refurbished over the next two years as the market responds to continuing demand. According to Savills, Grade B has accounted for an average of 62 percent of the city’s annual take up over the last 10 years, and with Grade A supplies running low the proportion could be even higher in 2016. Despite growing demand for Grade A office space in Manchester over the last three years, annual take up has consistently been under pinned by larger Grade B occupiers seeking to balance high quality offices with value for money. Savills also reports that the TMT sector has taken more Grade B space in Manchester than any other sector over the last five years, with deals totalling 710,889 sq ft (66,042 sq m); a significant increase on the 294,631 sq ft (27,371 sq m) of secondary space let to TMT occupiers in the previous five years.

March 22, 2016

A growing need to create an office that attracts rather than repels staff ⁰

by Darren Bilsborough • Comment, Property, Workplace, Workplace design

So where do you start when identifying the attributes that make an office an ‘attractor’ for staff? There are numerous articles extolling the virtues of everything from pool tables, to hammocks, creative “playgrounds” and all manner of enticing and unique workplace design considerations. However, I believe that there are more intangible and subjective issues at stake such as building aesthetics, prestige and values alignment. Very few businesses benefit from working in low-key, nondescript locations. The only likely motivation for occupying such a space would be cost-driven. Likewise, nobody wants to work in a building that is run-down, outdated and clearly past its best-by date. It is preferable for most office workers to work in a building that is new, interesting, prestigious or an acknowledged landmark. It becomes something they can be proud of and would be happy to share with family, friends and colleagues.

March 18, 2016

Increase in commercial office take up across Europe expected to continue ⁰

by Sara Bean • Facilities management, News, Property

The commercial property occupier markets across Europe recorded healthy improvements in activity during 2015, with the total take-up in the major office markets rising by 10 percent, according to Knight Frank’s latest European Quarterly Report. Although there was a drop in take-up in Europe’s two largest markets, London and Paris, this was made up by the strong performance of German, Iberian and Central and Eastern Europe markets. Commercial property rents rose by around 3.5 percent over the course of 2015, largely due to growth in markets such as Dublin, London, Madrid and Stockholm. Rental growth is expected to spread to a wider range of cities in 2016 with Paris, for example, expected to see prime office rents rise following more than two years of stability. A total of €64.5 billion was invested in European commercial property in Q4 2015, taking volumes for the full year to €238.5 billion. This represents a 25 percent increase on 2014.

March 16, 2016

Hong Kong, London and Beijing most expensive cities for office space ⁰

by Sara Bean • Cities, Facilities management, News, Property

Hong Kong is the world’s most expensive office location, followed by London, Beijing and New York.This is according to JLL’s Premium Office Rent Tracker, which compares like-for-like occupation costs across 24 cities around the world. This ranks Established World Cities such as New York and London, Emerging World Cities like Shanghai, Dubai and Mumbai, and New World Cities such as San Francisco, Boston and Toronto. The latest research shows that six of the top ten most expensive cities for office rentals are in Asia; with Hong Kong the world’s costliest office rental market on a net basis as well as including added costs such as service charges and property tax. The tracker found continued demand prime office space, despite a rise in economic uncertainty; while across the global cities, the technology, media and telecommunications sectors are moving into premium office space – previously dominated by the finance and professional services sector.

March 12, 2016

Office redesign a priority + Menstrual leave debate + Nine workplace trends ⁰

by Sara Bean • Facilities management, Flexible working, Property, Workplace, Workplace design

In this week’s Insight Newsletter; Mark Eltringham weighs in on the flexible working/menstrual leave debate; Tricia McCall looks at the way the latest workplace designs are influencing the classroom. We learn about the nine workplace trends that managers should address; that staff believe that 91 percent of firms won’t be competitive by 2020 and that a majority of managers see redesigning their organisation as their most important priority. In news – the Government fails to deliver on technology; London occupiers will pay just for a view; and the CIPD warns that not enough organisations are taking action to address the causes of gender inequality. Download our latest Insight Briefing, produced in partnership with Connection, on how the boundless office can be freed from the shackles of time and place and access the latest issue of Work&Place. Visit our new events page, follow us on Twitter and join our LinkedIn Group to discuss these and other stories.

March 10, 2016

Rents stabilise in London, but occupiers will pay premiums for views ⁰

by Sara Bean • Facilities management, News, Property

Demand for office space across prime Central London remains strong, with 3.4m sq ft of lettings recorded in Q4 2015, according to the latest Office Market Bulletin from Cluttons. However, even with continued high demand, prime rents have started to flatten, with rent rises seen in only six of 18 submarkets. While Canary Wharf witnessed a rental hike of 5.6 percent during Q4, underpinned by occupiers who are willing to move further away from the core, particularly for large floorplates, to areas perceived to offer good value; in contrast, the City Core, which already has a high amount of good quality space, appears to be struggling to absorb the large increase of supply coming through, causing rents to stabilise. And towards the end of 2015 further developments within the City were announced which, if completed, could lead to a supply glut. Across the markets though, the top floors in the best schemes are attracting an increasing rent premium of 5-10 percent.

March 9, 2016

Corporate real estate strategy shifts focus from cost to people ⁰

by Sara Bean • Facilities management, Flexible working, News, Property, Workplace, Workplace design

A new survey of corporate executives indicates a major shift in how companies make real estate decisions today, with more than half (50 percent) saying that talent is more important than cost (31 percent) as their foremost consideration. As a result, executives view the workplace as primarily a recruitment and retention tool that offers attributes such as a flexible workplace, high quality amenities and interiors. But while the people and workplace experience dominate the corporate real estate agenda, according to CBRE’s Americas Occupier Survey – escalating costs are a major concern. Of survey respondents, 85 percent cite space efficiency and restructuring as a top strategy for reducing occupancy costs. These two issues are driving real estate conversations; with the result that workplace strategy is increasingly being viewed as both a critical employee attraction and retention strategy (57 percent), and as a means to control costs.