EMEA OCCUPIER SURVEY 2018 - OPTIMISING USER EXPERIENCE: THE PERSONALISED WORKPLACE - CBRE
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CBRE RES E A RCH
EMEA
OCCUPIER
SURVEY
2018
OPTIMISING USER
EXPERIENCE:
THE PERSONALISED
WORKPLACE
3
K E Y F I N DI N GS
• The 2018 CBRE EMEA Occupier Survey highlights a • Occupiers are also distinguishing between the
strong and growing focus by corporates on deploying various types of flexible space available, recognising
technology, wellness and flexible space as core the respective advantages that diverse types of space
elements in an agenda focussed on enhancing the can offer to companies of different types and at
user experience. varying stages of maturity. Innovation and talent are
increasingly mentioned as reasons for taking flexible
• Companies intend to invest more heavily in new space, again reflecting the predominant focus on
real estate technologies over the short to medium user experience.
term. Their reasons for doing so are increasingly
shifting towards enhancing the user experience and • The wellness agenda has evolved into a core pillar
also raising workforce productivity. This represents a of corporate real estate (CRE) strategy. Four out of
clear move away from aiming real estate technology five occupiers have, or plan to introduce, wellness
at purely operational goals such as energy programmes and an even higher proportion have
management. some degree of preference for wellness enabled/
capable buildings. This is supporting a range
• This shift of focus is reflected in the technologies of innovative approaches to fostering wellness,
of choice: wayfinding apps, connected sensors, including broadening the offer.
wearables and personal environment control systems.
Room or seat reservation systems and sensors • Developing a flexible wellness offer will require
are also being increasingly adopted to support creative thinking, enhanced collaboration between
improvements in space efficiency. CRE, HR, IT and senior management and a critical
eye on which elements actually generate measurable
• These changes will place new demands on benefits.
management of the real estate asset, entailing
a shift towards better service levels and more • These shifts will work to the advantage of buildings
consumerisation, enabled by real-time and predictive and organisations that offer:
analytics. This is effectively a growing fusion of
workplace and service, reflected in widespread plans –– smart integrated analytics
to hire new skills such as data scientists and digital –– detailed utilisation metrics and predictive capacity
transformation officers. –– deployment of building data in support of staff
wellbeing
• Companies increasingly see flexible office space as a –– high levels of organisational responsiveness
key element of their corporate portfolios, and expect –– an increasingly personalised workplace offering,
to make far greater use of this type of space over the tailored to user preferences
next three years than they do currently. Indeed it is
the most popular asset type for future expansion.
© CBRE LIMITED EMEA OCCUPIER SURVEY REPORT 2018
4 5
T HE PE RSONALISED WO RK P L AC E
New real estate technologies, increased use of flexible space and the adoption of more advanced
WELLN ESS T HE WIDER AG EN DA
wellness programmes underpin occupiers’ drive towards the personalised workplace.
T E CHN OLO GY F L E X I B L E W O R K I NG 74%
expect to provide
82%
see location
42%
see technology
45%
convenience as a key
47%
expect to have more collaboration/ disruption as a top-
social space building selection factor three future challenge
significant use of
flexible offices by 2021
expect to hire
data scientists
55%
62% 46% co-working most
67%
popular future
80% 92%
see innovation space type
plan to increase real and talent as main
estate technology reasons for using
investment flexible office space see productive and
flexible workspaces have or will have have a preference
as vital to achieving wellness programmes for wellness
CRE goals capable buildings
56%
see user experience and
productivity as key reasons
for future technology
investment
EMEA OCCUPIER SURVEY REPORT 2018 © CBRE LIMITED © CBRE LIMITED EMEA OCCUPIER SURVEY REPORT 2018
6 7
I N T R OD UC TION
As we approach the end of this economic cycle, But these priorities don’t exist in a vacuum. Cost FIGURE 1 :
corporate occupiers face a range of issues and a management remains a strong driver of global SA M PLE COM POSITION BY SECTOR
pressing need to find the right balance between location strategies, building selection and indeed the
radical innovation and prudent efficiency. Three overarching role of the CRE function. With no single
key issues stand out: factor dominating the property agenda, corporates will 2% Petroleum,
3%
Third Party Oil and Gas
increasingly need to adopt a “dashboard” approach
20%
Space Provider
• deploying real estate technology only where it towards fostering innovation and enhancing user
optimises the user experience experience on the one hand, while also securing cost Conglomerate 3% Banking
and efficiency gains on the other.
Insurance 4%
and Finance
• incorporating wellness strategies into building
selection and workforce management The 2018 CBRE EMEA Occupier survey covered 114
• using flexible space as part of a range of portfolio
companies spanning a broad range of sectors notably
banking and finance, technology, life sciences and
Food and
Drink 4%
solutions to support wider business goals such as
agility, innovation and talent attraction
professional services. Nearly half of the respondents are
headquartered in either the UK or USA, and a further
Professional
Service 4%
third in the major European markets of Germany,
France, Italy, Sweden and Spain. 5%
Automotive
6%
Manufacturing
18%
Technology and
Telecommunications
6%
Healthcare and
Life Sciences
6% 11%
Pharmaceuticals
and Biotechnology
9% Others
Professional
Services – Legal
Source: CBRE Research, 2018
EMEA OCCUPIER SURVEY REPORT 2018 © CBRE LIMITED © CBRE LIMITED EMEA OCCUPIER SURVEY REPORT 2018
8 9
T ECH N OLOGY: F OC U S SH IFTIN G TO TH E Nearly two-thirds (62%) of companies
U SE R E XPERIENC E
plan to increase their investment in real
More companies are intending to invest in new real The widespread deployment of new technology and
estate technologies. Their reasons for doing so, while the digitisation of corporate operations and business estate technology over the next three
to some extent still reflecting “operational” goals models is relentless, and it is increasingly recognised
such as optimising building and energy management, that the pace of technological change presents
are increasingly shifting towards enhancing the user both challenge and opportunity. Over two-thirds of years, most of them in the next year
experience and hence raising workforce productivity. companies (69%) expect technological innovation to
We expect this shift to accelerate, and for occupiers to have a high or very high impact on them over the next
become more innovative, and to embrace emerging three years, with a further 25% expecting a moderate
technologies in their approach. impact.
This is what is producing the sharp rise in corporates’
intentions to invest in new real estate technology.
Nearly two-thirds (62%) of companies plan to increase
their investment in real estate technology over the next
three years, most of them in the next year, and a further
8% to do so in the period from 2020 onwards.
F IG UR E 2:
T EC H NO LO GY I MPAC T D R I V I NG G REATER I NVES TMENT
INCREASED REAL ESTATE
INCREASED TECH IMPACT
TECH INVESTMENT
£
e
69% 62%
OCCUPIER IN SIG HT IN VESTOR IN SI G H T
• Evaluate scope for, and benefits of, increased • Consider potential to retrofit existing buildings,
Say technology innovations will have Plan to increase investment in real investment in real estate technology, linked to and impact on design and fit-out of new
a high or very high impact on their estate technology over next three years wider assessment of tech impact on business developments.
business (40% in the next year) operations.
Source: CBRE Research, 2018
EMEA OCCUPIER SURVEY REPORT 2018 © CBRE LIMITED © CBRE LIMITED EMEA OCCUPIER SURVEY REPORT 2018
10 11
R E ACH I NG THE EF F IC IEN C Y –
E X PE RI E NC E OPTIM U M
Increased technology investment can be seen as increasingly being supplanted by “people” objectives: OCCUPIER IN SIG HT IN VESTOR IN SI G H T
an attempt to stay (or get) ahead of the game, and enhancing user experience for employees, but also
many view technological change as an opportunity for clients and other visitors, and so raising workforce • Adopt an integrated planning approach • Assess the ability of stabilised assets to
rather than a threat. As a result we are seeing marked productivity. This is consistent with the aim of using across roles, technologies and brand so as to accommodate new user-focussed technologies.
changes in both the reasons for accelerating technology buildings to project elements of the corporate brand, understand impacts and interdependencies.
deployment, and the types of technology being which presents a challenge to the growing flexible
adopted. While new technology products and solutions office sector.
are increasingly more affordable, the speed of change Even in established areas of technology application, These investments in technology need to be viewed
and the range of proptech options which touch every Turning to the real estate technology tools available such as space utilisation tracking, the product focus is against the widespread digitisation of business
step of the property lifecycle raises a different challenge to companies, the areas of strongest growth in shifting. Building access or badge data (65%) remains processes, which will undoubtedly influence the
to the uninitiated. Critically, they will need to select interest compared with last year include wayfinding dominant, but room or seat reservation systems (31%) breadth and pace of change in each organisation.
investments which do not become obsolete before the apps, connected sensors, wearables and personal and sensors (22%) are also being increasingly adopted The extent to which an organisation already
benefits can be embedded into the business processes environment control systems. Industry 4.0 (connected to support improvements in space efficiency. The more embraces innovation around artificial intelligence,
they are designed to support. digital devices, process automation and robotics – all progressive organisations are integrating data streams automation, virtual reality etc. may well affect the
linked through cloud computing) and the use of virtual/ from different systems and increasingly seeking to apply scale and speed of further investment.
There are clear differences emerging between the augmented reality are also starting to be mentioned. more predictive analytics and, ultimately, more building
current and future rationales for deploying real estate Combining the growing appetite for technology automation. The overarching aim is to optimise the
technology. Historically, and currently, the focus has investment with a clear shift in the rationale for doing provision and distribution of work settings to support
been on securing operational efficiencies through, so, this looks to us like the start of a step change in the agile requirements of the workforce.
for example, more efficient energy management and workplace technology with potentially far-reaching
better FM. These aims haven’t been dropped, but are consequences.
FIGURE 4 :
WHICH TECH? FOCUS ON THE USER, N OT THE B U IL DING
F IG UR E 3:
WHY AR E O C C U P I E R S U S I N G TEC H ? CURRENTLY FUTURE
T HE S H I F T FR O M E FFI C I E N C Y TO EXPERI ENC E 70%
CURRENTLY FUTURE
60%
50%
62%
40%
39% 30%
63% 64%
42% 56% 20%
43%
39%
23%
47%
40%
10% 20% 21%
9%
0%
Operational efficiency User experience and productivity Virtual/
Augmented reality
Personal environment
control systems
External,
connected sensors
Wayfinding apps
for end users
Energy management
controls
Source: CBRE Research, 2018 Source: CBRE Research, 2018
EMEA OCCUPIER SURVEY REPORT 2018 © CBRE LIMITED © CBRE LIMITED EMEA OCCUPIER SURVEY REPORT 2018
12 13
CH AN G ING ASSETS A N D N EW RO L ES
Companies are looking to hire new roles to support their drive
OCCUPIER IN SIG HT IN VESTOR IN SI G H T
towards improved user experience and higher productivity
• Critically assess ability of all elements of • Incorporate adaptability and service level
the operational portfolio, separately and in criteria into asset plans and leasing strategies.
What could all this mean for assets and corporate advantage by attracting and retaining the best talent, combination, to support aspirations around
real estate? We think these changes will spawn new as well as driving productivity improvements. service levels.
forms of asset configuration/workspace design and • Effectively curate efforts, and roles, to raise
place a range of new demands on management of The curation of these aims, increasingly enabled by workplace quality and service levels.
the real estate asset, namely a shift towards better the adoption of smart technologies, is also starting to
service levels and more consumerisation: effectively generate changes in the role and capabilities of the
the personalisation of the workplace. It is already CRE function and other central services. Companies
generating terms such as “offpitality” and “talentism” are looking to hire new roles to support their drive These are relatively small segments of the labour Overall, the increased adoption of new technologies
that capture the primacy of human capital and the towards improved user experiences and productivity. market, and real estate skills in these areas are is having a range of impacts. As well as influencing
fusion of workplace and services, tailored to the Nearly half plan to hire data scientists (47%) and digital particularly scarce. For example, there are only about the design and management of workplaces, it is
individual preferences of the employee. transformation officers (46%), with 38% looking to hire 13,000 self-described digital transformation officers also affecting the core roles, responsibilities and
user-experience leads. Interestingly HR and technology globally, of whom about 3% list real estate as a skill. organisational structure of the CRE function and its
One common target is greater connectivity and functions in some companies are seeking to hire similar Data science and user experience are larger industries interaction with other parts of the business such as HR
integration of functions, both as an end in itself and positions – the race to see which support function can but with even lower representation of real estate skills1. and technology.
to support enhancement of brand values. There is take the lead in the provision of employee experiences
an increased business focus on optimising employee is undoubtedly on. 1
Source: LinkedIn
experience as a means of driving competitive
FIGURE 5 :
WHICH FUTURE JOB PROFILES WILL REA L ESTATE
TEA M S N EED TO HIRE?
47% 46% 38%
Data Digital transformation User experience
scientists officers leads
Source: CBRE Research, 2018
EMEA OCCUPIER SURVEY REPORT 2018 © CBRE LIMITED © CBRE LIMITED EMEA OCCUPIER SURVEY REPORT 2018
14 15
FLE XI B LE OF F IC E SPAC E C O M IN G O F AG E
The flexible office market is maturing fast, and
FIGURE 7 :
companies see flexible office space as a key element Innovation and talent are
of their corporate portfolios. At a general level, the REA SON S FOR USIN G FLEX IB LE SPACE A RE EVOLVING
proportion of companies whose use of flexible space increasingly mentioned as 2017 2018
is moderate to substantial is expected to rise from 30%
currently to 45% in three years’ time. The proportion reasons for taking flexible
45%
making no use at all of flexible space is expected Reduce costs
to decline from 35% to 21%, indicating a growing space 42%
awareness and broadening of interest even among
Need a short term 52%
previous non-adopters.
space solution
41%
Occupiers are also increasingly differentiating among serviced/furnished space as the most popular type of
the various types of flexible space available, and flexible space. Even within the co-working market, we Increase flexibility 48%
in leasing terms
in general are favouring co-working space. All see anticipate there will be an increased segmentation 39%
double-digit increases in their expected level of usage of the sector as the supplier base evolves, offering
in three years’ time compared with today. The increase bespoke solutions to specific interest groups – whether Promote 14%
innovation
is most marked for co-working space which sees a rise this be industry verticals, diversity groups or service/ 28%
of over 20 percentage points to 56%, taking it above product types.
Attract and 14%
retain talent 18%
F IG UR E 6: 0% 10% 20% 30% 40% 50% 60% 70%
T HE R I S E AN D R I SE O F FLE XI B L E OFFI C E S PAC E
% OF OCCUPIERS
PERCENTAGE OF OCCUPIERS WITH SUBSTANTIAL/MODERATE USE OF OFFICE TYPES
Source: CBRE Research, 2018
CURRENTLY NEXT THREE YEARS
This trend reflects growing recognition of the short-term or overspill space or more flexible leases,
19% advantages that different types of space can offer rather than forming part of a wider cultural shift or
Business incubator
or accelerator to diverse companies at varying stages of maturity. change management programme. These are still the
29%
For instance the “buzz”, business advice and mentoring dominant reasons but all have declined from last year.
support available in a business incubator or innovation By contrast, innovation and talent are increasingly
24% centre will appeal most to a start-up or company in a mentioned as reasons for taking flexible space and are
Innovation
centre first-growth phase, while co-working and serviced space the only factors to have risen compared with last year.
40%
increasingly appeal to a wide range of corporates
attracted by the amenity level and the networking One issue that arises from this is the extent to which
34%
Co-working opportunities provided with similar organisations and corporate brand and culture can withstand growth in
space
56% interest groups. the use of third-party flexible space. Fragmentation
of the workforce, an increase in the proportion
40%
There is also a qualitative shift evident in companies’ of contingent and freelance workers, alongside a
Serviced/
Furnished reasons for seeking flexible space. To date, growth perceived reduction in employee loyalty, is a concern
offices 50%
in demand for shared space has been mostly driven for some companies and may serve to impose a ceiling
by short-term practical aims such as the need for on their use of flex space.
0% 10% 20% 30% 40% 50% 60%
Source: CBRE Research, 2018
EMEA OCCUPIER SURVEY REPORT 2018 © CBRE LIMITED © CBRE LIMITED EMEA OCCUPIER SURVEY REPORT 201816 17
W E L L N E S S : A C O R E PART O F C R E ST R AT E GY
We think this will lead larger corporations to respond The challenge for occupiers now is to develop the A key offshoot of the focus on talent and productivity is
to the emerging flex market dynamics by developing capacity to evaluate the most appropriate balance the evolution of the wellness agenda, which has evolved 80% of occupiers have, or
their own bespoke co-working environments, which between core and flexible space, and then how to into a core pillar of CRE strategy. In part this reflects
mirror the design, service and “vibe” of third party configure both to best fit user requirements. This will growing evidence that the quality of the workplace is a plan to introduce, wellness
spaces, supported by similar technologies and require ongoing assessment of the optimal balance major influence on health and stress levels, that work-
concierge solutions, but delivered and operated directly between enterprise efficiency and cost effectiveness life balance concerns are growing and that the benefits, programmes
to preserve the relationship between employer and on the one hand, and the realtime and predictive for instance in reduced absenteeism and increased
employee. assessment of user preferences on the other. engagement, are significant.
It is also consistent with the growing focus of some
governments, public bodies and private health
providers on prevention, particularly of long-term health
The flexible office market is conditions which consume a high proportion of health
budgets. As a result there is a trend towards companies
maturing fast, and companies taking a much more proactive and preventative
approach to wellbeing through organised programmes
see flexible office space as a designed to support employees, and sometimes their
families, in adopting healthier lifestyles.
key element of their corporate
In this year’s survey 80% of occupiers have, or plan to
portfolios introduce, wellness programmes (up 9% on last year),
which mostly consist of a balanced mix of physical and
mental health awareness programmes, exercise and
nutrition, and some form or mindfulness or relaxation
sessions.
FIGURE 8 :
OCCUPIERS IN CREA SIN GLY HAVE
OR WA N T TO IN TRODUCE FORM A L
WELLN ESS PROGRA M M ES
71% 80%
O CCU P I E R I N S IG H T INV E S TOR INS IGH T
• Differentiate across different types of flexible • Analyse impacts of flexible space on building
space to determine their potential portfolio role income characteristics, at different levels of
and benefits. provision and different revenue models.
• Explore impacts on brand and culture of different • Assess relative risk characteristics of flexible
levels of flexible space usage. offices as an investment class. 2017 2018
Source: CBRE Research, 2018
EMEA OCCUPIER SURVEY REPORT 2018 © CBRE LIMITED © CBRE LIMITED EMEA OCCUPIER SURVEY REPORT 201818 19
W HAT DO E S T HI S ME AN F O R T HE F U T U R E OF
F IG UR E 9: Moreover, 92% of occupiers have some degree of
WEL L NE S S I S I N C R E A S I N G LY preference for wellness enabled/capable buildings. W O R K S PAC E ?
Nearly half (45%, compared with 33% last year)
AF F E CT ING B U I LD I N G indicate that they either have a strong preference for
SELE CT I O N wellness provision in their building selection or that it Developing a flexible wellness offer will require creative even than in previous surveys, collaboration among
fundamentally sways their decision. thinking, enhanced collaboration between CRE, HR, employees, and between employees and clients,
IT and senior management and a critical eye on which remains the main priority. A range of other drivers
At one level this is as strong endorsement of the elements actually generate measurable benefits. – including organisational flexibility, talent retention
advantages of wellness programmes as a means Occupiers are taking a more considered approach, and better space utilisation – are cited by about a
of enhancing employee wellbeing and productivity. identifying relevant measures of success, what is third of companies, as is cost saving (38%) which is a
effective, which metrics to track, and how to make any marked reduction on the previous year’s finding (61%).
Equally, the ability to execute may be constrained by the changes stick. The next level of wellness programmes The benefits of proactive investment, as opposed to
very limited availability of WELL Certified™ buildings. will a have a heightened focus on ROI, with technology defensive cost management, are evidently playing
This is giving rise to a range of innovative approaches playing a major role in measuring it. a greater role in the implementation of workplace
to fostering wellness in existing buildings, including strategies.
energy rooms and sleeping pods, and broadening the Involving the landlord may also be fruitful, particularly
offer to include things like parent rooms for nursing given the occupiers’ difficulty in implementing wellness The emphasis on people is most marked with respect
mothers, subsidised emergency childcare policy and the programmes in existing buildings, as opposed to new to the amenities and services that companies expect to
introduction of technology-free “reflection spaces”. developments. Landlords retaining and paying for have to provide in the future. Collaboration and social
wellness suites, for instance on vacant floors of multi-let spaces (77%) clearly dominate, with the second element
92%
It even includes some companies seeking to ban emails buildings, may be mutually beneficial. The opportunity suggesting growing encouragement of purely social
outside working hours, and growing interest in the to seek enhanced wellness facilities at initial letting or interaction in the workplace. Companies also expect
role of a Chief Happiness Officer (CHO) with a remit lease renewal should at least be explored. to be providing a growing range of employee services
Have preference for buildings capable to engage, motivate and raise levels of wellbeing and such as dry cleaning and parcel delivery (48%) and
happiness in the workplace. The growing focus on employee wellbeing is also enhanced front of house services such as reception and
of supporting wellness initiatives reflected in broader workplace strategies. While concierge (51%). Both point towards a rapidly growing
Source: CBRE Research, 2018 the main drivers of workplace strategy are more focus on service and hospitality levels.
FIGURE 1 0 :
O CCU P I E R IN S IG H T INV E S TOR INS IGH T WHAT WILL OCCUPIERS OR LA N DLORDS HAVE TO PROV IDE IN THE
FUTURE? THE TOP SERVICES FOCUS ON EX PERIEN CE
• Develop measurable criteria for assessing the • Explore scope to retro-provide wellness facilities
ROI of different elements of wellness provision. in existing buildings.
• Consult and innovate on wellness elements most • Assess potential to provide or refit collaboration
valued by workforce. spaces and other priority amenities.
77% 51% 48% 38% 36%
Collaboration/ Front of Range of Issue Bring your own
Social spaces house employee resolution device/Access to
services services office networks
Source: CBRE Research, 2018
EMEA OCCUPIER SURVEY REPORT 2018 © CBRE LIMITED © CBRE LIMITED EMEA OCCUPIER SURVEY REPORT 201820 21
T HE W I DER PIC TURE
Elements of the three main focus areas – technology, • The most important elements of CRE strategy are • Similarly for building selection, cost (91%) continues FIGURE 11:
wellness and flexibility – are linked to wider operational cost-reduction, business integration/alignment and to dominate but location convenience/accessibility
THE NUMBER ONE FUTURE
and CRE challenges. At a general level, the pattern of talent attraction and development. (81%) has risen sharply in importance as has brand
companies’ concerns and priorities have changed very image (24%). CHALLENGE FOR CORPORATIONS
little from last year: • The mechanisms identified for this again focus
on productive and flexible workspaces (67%) • Cost-saving initiatives continue to be pursued on
and improved data quality (65%), although several fronts: space efficiency programmes, disposal
more outsourcing/strategic partnering (24%) and of vacant surplus space and lease renegotiations
upgrading supplier capability (21%) have both risen. have all declined possibly because of the late stage
in the cycle, and because the growing emphasis on
• Although only a minority of companies have a flexibility reduces the scope for action within existing
formal on-off shore strategy to inform their location lease commitments. Relocation, energy management
decision-making, the main driver is still cost and supplier consolidation initiatives are becoming
management although centralisation and corporate more popular, suggesting that occupiers are
culture also feature heavily. becoming more lateral with their decision-making in
this area.
42%
• Companies perceive that there is a wide range of
external challenges with no single issue dominating.
Technology
Economic uncertainty (41%) appears to have disruption
receded, replaced by technology disruption (42%)
Source: CBRE Research, 2018
as the number one concern.
• Two other areas have risen notably: regulation
and legislation (27%) and facility obsolescence
(21%). The first of these may reflect the perceived
impact of things like the new Lease Accounting
Standards, and the General Data Protection
Regulation (GDPR) to be introduced in May.
OCCUPIER IN S I G H T
• Concern about facility obsolescence reflects the
impact of growing flexibility demands on buildings, • Develop data-driven “agile procurement”
especially older buildings. Consequences include approach to acquiring equipment and services.
more frequent adaptation of base-build and/or
fit-out, changes to capital planning and decisions
on whether to lease things like furniture and IN VESTOR IN S I G H T
equipment – effectively “agile procurement”. This is
all consistent with the need, and ability, to manage • Critically assess obsolescence profiles of
and anticipate occupancy as precisely as possible buildings and portfolios.
in order to allow maximum flexibility for frontline
functions.
EMEA OCCUPIER SURVEY REPORT 2018 © CBRE LIMITED © CBRE LIMITED EMEA OCCUPIER SURVEY REPORT 201822 23
W HAT DOES THIS AL L M EA N FO R TH E FU TU R E
OF THE C ORPORATE P O RTFO L IO ?
At the same time, corporate occupiers are becoming As CRE functions have generally already outsourced
The digitisation and automation of businesses, and the supporting increasingly sophisticated in their assessments of the delivery of tactical real estate services (such
demand for space across their business, both in the as transactions, portfolio management, facilities
ecosystem, will drive up demand for data services and associate short term and beyond. There is far greater awareness management or project management solutions) the
of the availability and utilisation patterns of existing focus of the retained CRE organisations is increasingly
critical environments workstations. This is improving mainly through the geared towards CRM and the management of internal
deployment of more accurate occupancy tracking customer stakeholders. This is driving a more proactive
technologies. The impact of the imminent new and thorough assessment of space requirements,
The combined effect of these changes is forcing data centres exposure to expand in the near future, Lease Accounting Standards also places significant mapped to a more robust analysis of availability.
companies to think more creatively about the overall compared with Life Sciences and Banking and Finance requirements on corporates to track more transparently
efficiency and agility of their portfolios and the at just 13% and 29% respectively. However, in a similar the cost and obligations of their leased portfolios. Taken together with the growing maturation of flexible
capabilities of individual buildings within them. One way to increased use of flexible office space, data space markets, this is leading to a more refined
consequence of this is possible changes in portfolio centre expansion won’t necessarily be incorporated into capability among corporate occupiers to carry out
balance and asset structure over the next few years, real estate portfolios under traditional lease terms, but precise occupancy planning, including the ability to
with growing emphasis in two areas: instead will go into “colocation” centres, where data map the supply of space on demand.
server capacity is acquired in a similar way.
Flexible offices: 64% of occupiers expect to expand in
flexible office space over the next three years, making it The speed of change and scale of portfolio restructuring FIGURE 1 2 :
the most popular area for expansion. is, to some extent, being driven by the increased HOW WILL THE CORPORATE PORTFOLIO CHA N GE
dependency and application of data in the operation OVER THE N EX T THREE YEA RS?
Data centres: 28% expect to see expansion in their of businesses and the buildings which support them.
demand for data centre space, reflecting the growing We anticipate that the digitisation and automation of
NO CHANGE CONTRACT EXPAND
data and backup demands associated with technology businesses, and the supporting ecosystem, will drive
growth. up demand for data services and associate critical 100%
environments.
Increased demand for data centre space is the product
30%
of more widespread and intense use of technology in We are also witnessing the maturation of the flexible 80%
many areas of corporations’ operations; not limited to sector, principally across the office markets, but 11%
building and employee sensor data, but the data that increasingly across other asset classes as well including 6%
is produced and relied upon for the daily operation logistics and retail. This reflects the growing activism of 60% 36%
of their businesses. Additionally, the development of occupiers seeking greater convenience and more ‘on
33% 44%
Internet of Things (IoT) into the mainstream in 2018 will demand’ solutions where there is a growing emphasis
50%
generate and aggregate enormous datasets, requiring on the provision of services, versus the provision of 40%
16%
increased storage capacity. This helps to explain why space. 64%
61% of Technology and Telecom occupiers expect their
20%
20% 16%
28%
19%
15% 14%
0%
Office Flexible/ Retail Data centres Industrial and
Co-working space logistics
Source: CBRE Research, 2018
EMEA OCCUPIER SURVEY REPORT 2018 © CBRE LIMITED © CBRE LIMITED EMEA OCCUPIER SURVEY REPORT 201824 25
C O N C LUS I O N S
Occupiers are refining their As well as changes in portfolio balance, we are also
seeing growing interest in new types of hybrid asset • The survey strongly indicates that there is a growing • Occupiers are also differentiating among the various
ability to carry out precise that offer different combinations of space types and, expectation that space is provided as a service which types of flexible space available, and in general
critically, the ability to alter the mix and function of enhances user experience, productivity and wellbeing favouring co-working space. Even within this sub-
occupancy planning, including space within the same building. The design, building and forms part of a more dynamic workplace segment, we anticipate increased segmentation as
management and technology demands associated with solution. In this sense, home working, mobile the supplier base evolves, offering bespoke solutions
the capacity to map the supply this shift are immense and need to draw on: working and both traditional and flexible office to different occupier types and functions.
environments all contribute to the effectiveness of an
of space on demand • Smart integrated analytics agile working strategy. There are three main strands • The wellness agenda has evolved into a core pillar
to this journey: technology, flexibility and wellness. of CRE strategy. Four-fifths of occupiers have, or
• Detailed utilisation metrics and predictive capacity plan to introduce, wellness programmes and over
• Companies’ reasons for deploying new real estate 90% have some degree of preference for wellness
• Deployment of building data in support of staff technologies are increasingly shifting towards enabled/capable buildings. This is giving rise to a
wellbeing enhancing the user experience and raising workforce range of innovative approaches to fostering wellness,
productivity. This can also be seen as a response to including broadening the programme offer, and is
• High levels of organisational responsiveness the view that wider technological change represents also driving a strong focus on collaboration and
a challenge to operations for many sectors. social spaces among the amenities corporates feel
• An increasingly personalised workplace offering, they will need to provide.
tailored to user preferences • In any case, the technologies of choice increasingly
include things like wayfinding apps, connected • Taken together, these changes will enable a more
The design and operation of a modern workplace is sensors, wearables and personal environment control refined occupancy planning capability among
increasingly intelligent and capable of adapting to the systems – all of which are focussed on people rather corporate occupiers, generate new forms of asset
different demands of a modern business. In this context, than building management. There are other far- configuration and workspace design, and place new
we expect the very purpose of tomorrow’s workplace to reaching consequences, including the intention to demands on management of the real estate asset,
evolve towards accommodating a more dynamic range recruit into new roles such as data scientists and namely a shift towards better service levels and
of activities – both in terms of the type and intensity of digital information officers. more consumerisation: effectively the personalised
use. workplace.
• The flexible office market is maturing fast, and
As an example, IBM Watson coined the phrase companies see flexible office space as a key element
“Collaboratory” to describe their new IoT HQ in of their corporate portfolios. Increasingly the motives
Munich which seeks to provide a dynamic range of for this centre on innovation and talent, rather than
space solutions aligned to the changing needs of the short-term practical or operational aims.
business, working collaboratively with their partners in
the discovery of new technology-enabled solutions.
EMEA OCCUPIER SURVEY REPORT 2018 © CBRE LIMITED © CBRE LIMITED EMEA OCCUPIER SURVEY REPORT 201826
K EY CONTAC TS
GLO BAL R E S E A R C H OC C U PI ER RES EARC H
Nick Axford, Ph.D. Richard Holberton
Head of Research, Global Head of Occupier Research, EMEA
+44 20 7182 2876 +44 20 7182 3348
nick.axford@cbre.com richard.holberton@cbre.com
@NickAxford1
James Pearson
Neil Blake, Ph.D. EMEA Occupier Research
Head of Forecasting and Analytics, Global +44 20 7182 2623
+44 20 7182 2133 james.pearson2@cbre.com
neil.blake@cbre.com
@NeilBlake123 Julie Whelan
Head of Occupier Research, Americas
Richard Barkham Ph.D. +1 617 912 5229
Chief Economist, Global julie.whelan@cbre.com
+44 20 7182 2665
richard.barkham@cbre.com Cynthia Chan
Office Specialist, Asia Pacific Research
Jos Tromp +852 2820 2839
Head of Research, EMEA cynthia.chan@cbre.com.hk
+31 20 589 07 53
jos.tromp@cbre.com C BRE I NS TI TU TE
Henry Chin, Ph.D. Karen Ellzey
Head of Research, Asia Pacific Executive Managing Director, GWS Consulting
+852 2820 8160 +1 617 869 6154
henry.chin@cbre.com.hk karen.ellzey@cbre.com
@HenryChinPhD
Matt Toner
Spencer Levy Managing Director, CBRE Institute
Head of Research, Americas +1 302 373 0903
+1 617 912 5236 matt.toner@cbre.com
spencer.levy@cbre.com
@SpencerGLevy
To learn more about CBRE Research, or to access additional research reports, please visit the
Global Research Gateway at cbre.com/research.
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CBRE DISCLAIMER 2018
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest
CBRE Limited confirms that information contained herein, including projections, has been obtained from sources believed to be commercial real estate services and investment firm (based on 2016 revenue). The company has more than 75,000 employees
reliable. While we do not doubt their accuracy, we have not verified them and make no guarantee, warranty or representation (excluding affiliates), and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates)
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