New business models, tech-enabled ecosystems and changing investor and tenant expectations have restructured the dynamics of the commercial real estate industry. However, irrespective of size, business type or location, today, talent, cost, and economic uncertainty are the underlying principles of all the challenges being faced by the occupiers.
Around the world, corporate real estate executives (CRE) are focused on developing a workplace strategy for talent management and restructuring of business spaces in line with technological advances. The industry is trying its best to understand and cope up with the unique needs and preferences of the new workforce, which strives to collaborate and integrate with communities in a connected world, and expect an open & flexible workspace rather than having a mission to achieve the corner office. Presently, most of the relocation/co-location/expansion decisions are dependent on the talent availability.
Talent management and innovation are at top of the CEO’s agenda, however, cost concerns override and drive the potential for portfolio optimization. Given the CRE team’s strong alignment with CFO’s, cost optimization remains as the top agenda for CREs. Almost 85% of the executives leverage space restructuring in times of low availability in the established markets to achieve functional and financial advantages.
Economic uncertainties and dynamic business team demand a flexible workplace solution, which has been a major contributing factor in increased demand for co-working/managed offices spaces, thus providing tenants the flexibility to upsize/downsize as per market conditions, thus achieving greater efficiency in real estate costs.
Corporate real estate management teams are focusing on achieving enterprise goals by overcoming the above challenges as real estate is more than a space to work, and presents an opportunity to create and sustain competitive advantage.