Almost half (47%) of global firms expect to replace their corporate headquarters in the next three years, an increase on 40% two years ago.
Research by Knight Frank and Cresa also found that 55% of firms expect to increase their total office portfolio over the next three years, with the growth primarily driven by firms of up to 10,000 employees.
However, around 50% of the very largest firms surveyed – those with more than 50,000 employees – anticipate some reduction of space in their global portfolio.
The Knight Frank and Cresa’s (Y)ourspace report, published every two years, is based on a survey of workplace strategies and real estate requirements across 350 firms with a combined total of more than 10m employees.
The research reveals a return to office-centric models. Most global corporates (56%) plan to move towards a “hybrid” work style, offering employees a mix of home and office working, but 31% are implementing an office-first or office-only approach. Just 12% of firms plan to implement a work-from-anywhere, remote-first or fully flexible work style.
Tim Armstrong, global head of occupier strategy and solutions at Knight Frank, said: “For most occupiers, an office-centric approach in a more flexible environment will require a fundamental reworking of the workplace, and many occupiers will conclude that their current office buildings cannot meet their requirements. A rise in both the functional and physical obsolescence of buildings will drive occupiers to higher quality, more sustainable and amenity-rich space, but the supply of this space is coming under increasing pressure in global markets.”
The report lays bare the practical challenges employers face in implementing a post-pandemic workplace strategy that meets a growing list of corporate requirements. As many as 60% of respondents expect the complexity of managing their workplace strategy to increase in the next three years.
As firms look forward, real estate is now clearly seen as a strategic device for implementing corporate objectives, and not just a cost to be managed, with
Almost all respondents (94%) regard real estate as entirely or partially aligned with the broader strategy of the business. Some 86% of firms anticipate at least one form of business transformation, with the most common (45%) being entry into new geographical markets.
Lee Elliott, global head of occupier research at Knight Frank, said: “Now that we are in a truly post-pandemic world, corporate decision-makers are removing the blinkers and making clear decisions around their future corporate real estate strategy based on a broader array of business issues than just the pandemic. The vast majority are opting for a hybrid or office-first approach, bringing them much closer to how many corporates were viewing their future needs before the pandemic, with just 12% of firms now pursuing a remote-first or fully flexible model. Firms are looking to work their offices harder, but still offer some flexibility to staff.”
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