Cushman & Wakefield Survey Reveals CRE Occupier Demands

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20 June 2023

A “what occupiers want” survey from Cushman & Wakefield gives a glimpse into occupiers’ approach to workplace decisions.

Conducted in partnership with CoreNet Global, the survey results represent approximately 9.6 million employees globally and 741 msf of floor area.

The survey contains questions about trends in office location and the workplace, and perspectives on changes to real estate portfolios. Each year’s issue has a special theme, with this year being ESG in real estate.

 

"The office is not about keeping tabs on people, nor is it required for many workers to be productive. It is, in fact, a meeting point with clients, a place for creativity, innovation and synergies, as well as a place for learning and development. Right now, approximately half of occupiers believe their offices provide for these purposes; the remaining 45 per cent still have work to do.”

–David Smith

Head of Americas Insights, Global Research, Cushman & Wakefield

 

Watch the Video

 

 

Cost, Talent and Operational Excellence

 

Cost, talent and operational excellence are the top three strategic drivers that inform key real estate decisions. Talent is the second biggest priority in EMEA and remains number one in the Americas.

“Occupiers consistently identify cost, talent, and operational excellence as the top drivers of their real estate strategy and decisions,” said Dimitris Vlachopoulos, Partner and Head of Total Portfolio & Location Strategy at Cushman & Wakefield.

“The exact order of these has shifted some in 2023; talent continues to be very important—and remains No. 1 in the Americas—but cost has risen in importance. This is not surprising given the elevated uncertainty since mid-2022 as inflation peaked and, in response, interest rates began to rise.”

 

ESG Drivers Vary by Region

 

Since the last survey, ESG has moved up the priority list as a key corporate real estate driver, with two-thirds of executives indicating their firm has ESG goals that they have already begun to implement or are planning to implement.

“The reasons for aligning real estate portfolios with ESG goals vary by global region, with the Americas focusing mainly on company reputation, whilst EMEA focusing on climate change,” said Dimitris.

 

Communal Space is Key

 

The targeted amount of communal space within the office has doubled compared to pre-pandemic levels (40-50 per cent vs 20-30 per cent), with the majority of occupiers (89 per cent) seeing the office as a place for creativity and a planned meeting point.

“The purpose of the office is clearly changing but occupiers have not yet fully adapted to this new way of working. The office is not about keeping tabs on people, nor is it required for many workers to be productive. It is, in fact, a meeting point with clients, a place for creativity, innovation and synergies, as well as a place for learning and development. Right now, approximately half of occupiers believe their offices provide for these purposes; the remaining 45 per cent still have work to do,” said David Smith, Head of Americas Insights, Global Research at Cushman & Wakefield.

 

Recruitment Goes Global

 

Although Central Business Districts remain the most popular location for a company’s HQ, the survey also revealed that recruitment has expanded beyond city boundaries, with 26 per cent of respondents recruiting from anywhere in the world, possibly owing to the popularity of hybrid working and the resulting global availability of talent.

According to Cushman & Wakefield, CBD’s share of leasing activity is down, but only slightly from pre-pandemic levels (in the US, CBD’s share of Class A leasing has been 38.6 per cent since 2020 while it was 41.8 per cent in the three years prior to the pandemic).

80 per cent of firms have not considered moving their offices out of the CBD and only 8 per cent see that type of shift as a trend.

 

Average Office Occupancy Below 45%

 

Office occupancy remains low, with most occupiers running their offices at occupancy levels lower than 45 per cent, and 63 per cent plan to reduce their real estate footprint even more.

“Companies are working hard to adapt to an evolving landscape and shifting priorities post-pandemic. Finding the right balance is critical to making smart decisions about their workspace needs, and also for attracting and retaining the right talent, in the right location,” said Sonali Tare, Vice President, Strategic Content at CoreNet Global.

“There is no one-size-fits-all solution – what works is using data and metrics to devise a solution on an office-by-office basis.”

Picture: a photograph of three people looking at a laptop together, pointing at the screen. The image is taken from above and you can only see the people's legs, feet and arms. Image Credit: Unsplash

Article written by Ella Tansley | Published 20 June 2023

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