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Bottom line or top line ? Corporate real estate views on the twin challenges of cost management an growth

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Bottom line or top line ? Corporate real estate views on the twin challenges of cost management an growth

Corporate occupiers, particularly in Europe, continue to be tested by recessionary or near-recessionary economic conditions and a high degree of uncertainty. However, it is unclear the level to which this is impacting real estate operations and portfolio planning activity; or changing the building environments and the services being provided to support the evolving needs of employees. To explore these issues CBRE surveyed senior real estate decision makers of european corporate occupiers to assess their concerns, plans and challenges across a broad range of issues.

The results demonstrate a continued emphasis on effective cost management. Cost issues, along with the state of the economy, are seen as the biggest challenge for businesses. This focus on costs however, does not seem to have diminished companies’ expansion ambitions. Many are still looking to grow their operational networks, and are mainly looking at emerging markets, especially Asia, to do so.

In addition to global growth plans, the survey also looks at factors shaping corporate location decisions and workplace strategies at a micro-level. The results highlight continued underlying tensions between cost containment and companies’ growth aspirations. Partly in response to this, the results demonstrate an ongoing shift towards more flexible working paradigms in workplace management, and the significant role of technology in facilitating this process.

The survey also assesses elements of the organisation of corporate real estate (CRE) departments, their role and the relationship with other parts of the business, particularly management. Less than half of the respondents report that they have attained an optimal level of influence within the business. Finally we reveal a variety of buying approaches across different real estate services. For instance transaction management and facilities management tend to be more widely outsourced than other service areas.

Source : CBRE

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