Why the next 3 years are crucial for the office property sector
Over half of APAC firms say remote working is likely to be available to all by 2025.
Companies will look across their real estate portfolios to rethink their office spaces, invest in new technology and prioritise sustainability, as hybrid work becomes more entrenched in corporate culture, according to new research from real estate consultant JLL.
The Future of Work report reveals the trend towards dynamic working continues, with 56% of organisations in Asia Pacific saying that they will likely make remote working available to all employees by 2025 and corporate real estate (CRE) executives saying that successfully operating hybrid work will be the most important strategic priority over the next three years. This includes exploring flexible space options, with the average proportion of flexible spaces in Asia Pacific expected to grow between now and 2025.
“The next three years will prove to be an inflection point for real estate as businesses plot their future path and rethink the purpose of their portfolio,” said Jordi Martin, CEO, JLL Work Dynamics, Asia Pacific. “The changes accelerated by the pandemic represent an opportunity to pause, think about a long-term real estate strategy and how it aligns with future business priorities.”
According to JLL’s research, the shift to hybrid work has become a marker of change in the workplace, placing greater emphasis on how companies can support employee mental well-being and maintain productivity. Additionally, the findings showed that 80% of organisations in Asia Pacific agree that quality space is a top priority as high-quality spaces are best suited to facilitate the kind of workplaces, health and wellbeing amenities, and sustainability credentials employees and corporates increasingly need.
Alongside an increasingly hybrid world of work, total headcount and real estate footprint is also expected to grow. The focus for companies will be on investments in quality spaces to ensure the long-term success of hybrid work.
“As the office continues to evolve post-pandemic into a destination for collaboration, occupiers will need to continue increasing their investments in creative spaces,” said James Taylor, Head of Work Dynamics Research, Asia Pacific. “Real estate portfolio strategies to enhance social interaction among a geographically dispersed workforce will be more important than ever, and the focus is on organisations to create offices with less me-space and more we-space.”
Environmental and social aspirations will shape portfolio transformation
With buildings accounting for over 60% of carbon emissions in cities, organisations face ever increasing pressure to deliver clear outcomes in the race to net zero and create social value through real estate. That means sustainability strategies have a direct impact on real estate decisions, with 71% saying they are likely to pay a premium for green building credentials in the future.
However, stakeholder aspirations are not solely environmental. With diversity, inclusion and wellbeing now sitting high on the corporate agenda, companies are underpinning these objectives with further investment and resources. Over eight in 10 respondents agree that their organisations are acting today to make the workplace more inclusive and diverse for all employees.
As employees return to the office and the workforce recovers its momentum, flexible working spaces and environmental ambitions will increasingly become the cornerstones of a hybrid workplace.
To respond to the complex range of challenges, CRE leaders will need to focus more on harnessing specialist skills to achieve their strategic objectives. Over half of leading CRE functions anticipate greater reliance on external partners, with the two top areas for outsourcing growth expected to be health and wellbeing services, and sustainability strategy, by 2025.
For more information, please visit The Future of Work Survey 2022.