In February and March 2023, the international real estate consultancy Cushman & Wakefield, in cooperation with CoreNet Global, the worldwide professional network of corporate real estate managers, conducted a survey on tenant behaviour in the changed working environment subsequent to the Covid pandemic. The results are based on responses from CoreNet Global members in the Americas, EMEA and Asia Pacific. Respondents represent companies that identify as end-users, business promoters, and service providers/consultants.
"The results of our survey, in partnership with CoreNet Global, provide an in-depth look at the drivers of location and real estate decisions by tenants worldwide, demonstrating a shift in thinking and approaching post-pandemic decisions," said Dimitrios Vlachopoulos, Head of Portfolio & Location Strategy EMEA, C&W. "This shows how tenants are responding to the increasing importance of corporate ESG goals against the backdrop of climate change."
Different priorities in the Americas and EMEA
Cost, human resources and operational excellence are the three most important strategic factors influencing real estate decisions. While "personnel" is at the top of the priority list in the Americas, it ranks second in the EMEA region.
"Tenants identify costs, human resources and operational excellence as the key drivers of their real estate strategy and decisions. The ranking of these factors has changed somewhat in 2023. Personnel remains very important and continues to rank first in North and South America, but the importance of costs has increased. This is not surprising, given the increased uncertainty since mid-2022, when inflation peaked and interest rates started to rise," said Dimitrios Vlachopoulos.
The importance of ESG varies
ESG is gaining traction and most real estate teams have defined ESG goals, but their underlying factors vary by global region.
"Since the last survey, ESG has moved up from 8th to 5th place worldwide as a key driver for corporate real estate. Two-thirds of CRE executives said their company has defined, is already implementing or plans to set ESG targets. The reasons for adapting real estate portfolios to ESG requirements vary by global region. In the Americas, the focus is mainly on the company's reputation, while in the EMEA region, the focus is on environmentally responsible action," explains Dimitrios Vlachopoulos.
Common areas in offices are becoming increasingly important
The proportion of shared space within offices has almost doubled, compared to the pre-pandemic period, to between 40 and 50 percent from 20 to 30 percent before the advent of Covid. The majority of tenants (89 percent) see the office as a place for creativity, innovation, exchange of ideas and possible meetings.
"The purpose of the office is changing, but tenants have not yet fully adapted to the new way of working," comments David Smith, Head of Americas Insights, Global Research, C&W. "The office is not there to control employees, and many employees don't need the office to be productive. Rather, it is a place to meet clients, a place for creativity, innovation and synergies, as well as for learning and development. Currently, about half of tenants believe that their offices serve these purposes."
