The global tension between cost and talent in corporate real estate ⁰

Concerns over the health of the global economy, workforce strategies and rising costs and pace of business are heavily influencing real estate decision-making for major corporations, a new survey by CBRE of global corporate real estate executives claims. More than 400 respondents from around the world participated in the survey. Nearly half (49 percent) cited economic uncertainty as their greatest challenge, while 43 percent identified it as cost escalation. Forty-eight percent projected a stable real estate footprint for this year. Seventy-nine percent stated that they are actively using space-efficiency initiatives to manage costs, combining ‘ground-up workplace strategies with top-down cost management initiatives’. Workplace strategies are also driven by initiatives that aim to improve collaborative working and enhance a firm’s pool of talent as well as address other workplace issues such as wellbeing and work life balance.

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 important, with executives reporting workplace flexibility, high indoor environmental quality and easy access to public transportation as features important to employees.

“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.”

“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.”

Global corporate executives favoured 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.