Corporate Occupier Outlook improves as economic recovery continues
Corporate decision makers are responding to signs of economic improvement across Europe by shifting focus away from pure cost management to future growth opportunities, according to the latest annual European Occupier Survey1 by global real estate advisor, CBRE.
The survey, now in its fourth year, polls corporate real estate decision makers at global corporations collectively occupying approximately 2.7 billion sq ft (250 million sq m) worldwide. The survey shows corporates’ increased confidence in the economic recovery, with less than half [46%] identifying weak economies as a concern. In 2012 the overwhelming majority [70%], reported that the uncertain economic outlook in Europe was a key factor in their real estate strategy, with cost management being the primary objective.
Despite such positive signs, cost control remains a priority for corporates. The survey shows almost three quarters [72%] renegotiated leases in the past twelve months [compared to 45% in 2012], to ‘lock in’ deals while office rents are at, or close to, the bottom of the market. However, such efforts to reduce costs are likely to diminish as the recovery continues.
In addition, 61% of companies reported that they have reduced their real estate footprint by occupying space more efficiently. Such space optimisation strategies are increasingly prominent for corporates due to the balancing act between cost savings (reported by 56% as a key driver of alternative workplace strategies) and providing a collaborative working environment (39%) with the aim of improving employee productivity (37%). It is therefore interesting to see that the vast majority of companies are not widely adopting remote working strategies with 75% reporting that less than a quarter of staff work flexibly on a regular basis. This indicates that the office environment is still key which explains the focus on improving the quality of the workplace.