Real estate decisions loom for companies as they grapple with the future of work
Companies will look across their real estate portfolios to rethink their office spaces, invest in new technology and prioritize 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 percent of organizations 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.
“We see that organizations will accelerate strategic investments over the next three years to realize their long-term workforce and workplace priorities, and the remaining four months of 2022 will be a critical phase for CRE strategy,” said Joey Radovan, country head of JLL Philippines.
Marker of change
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, findings showed that 80 percent of organizations 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 well-being amenities, and sustainability credentials employees and corporates increasingly need.
“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 organizations to create offices with less me-space and more we-space.”
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.
“Office remains as an important element of work. We see wellness, sustainability, and technology gaining greater prominence in shaping the built-up environment,” said Janlo de los Reyes, head of research and strategic consulting of JLL Philippines.
Environmental, social aspirations
With buildings accounting for over 60 percent of carbon emissions in cities, organizations 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 percent 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 well-being 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 organizations 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.
Addressing challenges
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 well-being services, and sustainability strategy by 2025.
The Philippines’ awareness when it comes to sustainability practices has gone up by leaps and bounds, and our latest research identifies the five critical areas that organizations will need to consider for a sustainable, resilient, and inclusive future of work:
• Hybrid working is here to stay and calls for the rejuvenation of the office;
• In the near term, investing in quality space will be a greater priority than expanding total footprint;
• Environmental and social aspirations will shape future portfolio transformation;
• CRE functions need to double down on intelligent technology investments; and
• Real estate needs are becoming more sophisticated and complex.
“Planning is a never-ending process, with its rewards obtainable by those equipped with the right insight, strategy, and resources,” said Radovan. “I encourage investors and locators alike to take this time to review your business goals and revisit your plans to achieve them. If there is a time to pivot, that time is today.”
