Outsourced property service providers to gain as companies seek “smart growth”
Among the plethora of news releases during MIPIM last week came the results of the first Corporate Real Estate Global Survey by Jones Lang LaSalle and Thomson Reuters. This says the spotlight is moving from companies’ previous focus on cost control, to the area of productivity and “smart growth”. These are set to be the key drivers of property markets this year, the firm says.
Jones Lang LaSalle says the drive to use commercial property in the most productive manner “presents a powerful opportunity for CRE teams to drive strategic change and bring added value to their wider businesses.” The industry is increasing its reliance on outsourced service providers as it moves to boost its flexibility and productivity, it notes. Stuart Hicks, CEO of Corporate Solutions at JLL, says 80% of respondents to the survey are planning to fully or partly outsource their CRE functions within the next three years.
The desire to change the culture and nature of work and changing property portfolios to meet the “new organisational reality” were among the top influences cited on future real estate strategy. “Creating more efficient workspace that is conducive to modern work styles and receptive to the demands of knowledge workers will assist CRE leaders in meeting these demands and building additional value for their businesses,” JLL notes.
There were more than 500 responders to the worldwide survey, which attempts to identify the key challenges facing the industry and likely trends over the next three years. “Corporations have clearly shifted from short-term, survival-motivated tactics towards medium-term, strategic initiatives aimed at driving productivity enhancements,” noted Hicks. “Driving improved productivity by implementing more strategic real estate initiatives can release tremendous value, given that real estate typically accounts for 7% to 12% of a corporation’s total operating costs,” he added.
“These survey results should also be of interest to the investor community as they point at important cyclical and structural shifts in demand for space, as well as operational priorities for the tenants,” said Robert Ciemniak, global head of real estate markets at Thomson Reuters.
