Given the changes brought about by the pandemic, organizations around the world had to adapt to ensure the continuity of their normal day-to-day operations. But now that restrictions have started to loosen up and economies have started to open, the question being asked is – what becomes of the office?
Global corporate firms have participated in the Knight Frank Cresa Corporate Real Estate Sentiment Index to gauge general sentiment on areas such as growth, portfolio, and workplace dynamics. Here are some of the insights from the index.
A negative outlook on the global economy but better prospects for their own companies
With the uncertainty brought about by Covid-19 as well as the following recession, organizations don’t have a positive outlook on a macroeconomic scale. The World Bank warns of an upcoming recession amid an environment where central banks are trying to control inflation by increasing interest rates.
Instead, most organizations today have a much more positive outlook on their own prospects such as headcount growth, revenue generation, and capital expenditure.
Take note, however, that traditional sentiments on headcount used to correlate to positive movements in real estate footprint. That has since changed since operations have been less clear cut with some organizations choosing a more hybrid setup for their work.
Less relocation of core facilities
With companies having their own work arrangements, we can expect less relocation of core facilities. This means that this will drive greater lease renewals as occupiers will buy time. In addition to this, however, Forbes has stated that ensuring compliance, safety, training, and support are also essential in order to have a successful facility operation as well as happy team members.
Uncertainty in re-occupancy
There is still uncertainty when it comes to how re-occupancy will play out. While the sentiment has improved this quarter as compared to the last, it is more neutral, similar to how some organizations are trying out hybrid work.
Despite this, we can expect that occupiers will continue to think about how to improve the design, services, and amenities found within the workplace.
In addition, the density of occupation in the office is also likely to increase. As organizations move towards more hybrid forms of working, the floor space per person might decrease which reflects a greater density on a pure headcount basis.
Corporate Real Estate activity will be more focused on the workplace
Based on the index, the corporate real estate activity will be largely focused on the workplace than the portfolio level as organizations seek to reoccupy, reconfigure, and revitalize their existing real estate.
For any real estate matters, Santos Knight Frank is here to help you out. Download the white paper to learn more about the CRE sentiment index. Check out our website for inquiries or contact us at email@example.com.
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