Favourable lease options and a smart building have grown massively in importance to corporate occupiers when it comes to making a decision on choosing a building, according to the latest EMEA occupier survey from CBRE.
In CBRE’s 2018 report, just 16% of occupiers ranked favourable lease options as the most important factor in making a decision on a building; this year that figure had risen to 61%. The technologies in a building or whether it was “smart” were important to only 16% of occupiers in 2018; that rose to 30% this year.
Real estate costs and availability and the convenience of the location still remained the most significant factors for occupiers, at 86% and 74% respectively, but both of these recorded slight declines in their overall importance.
Employee engagement and talent attraction and development both ranked above cost reduction – an about-turn on 2018, when cost reduction was the single most important driver of CRE strategy and employee engagement was fourth.
How are corporate occupiers using real estate to attract staff?
1) Procurement and fit-out strategy: While traditional procurement and fit-out approaches are still favoured when taking large leases in a new building, the survey found that occupiers are increasingly influenced by internal building characteristics. Almost 60% of occupiers would be willing to pay a premium of at least 10% over typical prime rents for a curated high-amenity offer under a service agreement, compared with 46% which would pay a similar premium for a fully tech-enabled smart building.
2) Flexible space strategy: Corporate appetite for flexible space continues to grow, with the proportion of companies expecting to make significant use of flexible space over the next three years 20% higher than those who currently do so. The use of flexible space as a means of attracting and retaining talent is up by 10% on last year.
3) User experience strategy: Only one-third of companies have a formal user experience programme, or plan to introduce one. However, one-third of companies have plans to hire a UX lead and two-thirds would be willing to pay a premium for a building in which the landlord had provided an enhanced UX offer.
4) Technology strategy: Technology disruption – particularly AI and machine learning – is becoming a key driver of technology strategy. In total, 70% of companies intend to raise their level of real estate technology investment in the next few years towards a more people-focused approach. The methods of acquiring the skills needed to deliver these aims, such as data scientists, are becoming more sophisticated with corporates pursuing a variety of approaches, including outsourcing to specialists.
Main image © Rex/Shutterstock
To send feedback, e-mail samantha.mcclary@egi.co.uk or tweet @samanthamcclary or @estatesgazette
