Singapore hosted the CoreNet Global APAC Summit 2014 and, as the event drew to close, I began to reflect on the changing landscape for corporate real estate (CRE) professionals in Asia and what the evolving criteria and considerations are for CRE decision-makers as we move further into 2014 and look to 2015.
Traditionally, CRE decisions were all based around cost. Business leaders asked their CRE strategists to find the most affordable office space for their requirements. Cost is still a leading criteria for obvious reasons but, as Cushman & Wakefield’s on-site Summit survey found, other factors are becoming equally important as CRE strategy moves up the value-chain in Asia.
Location and infrastructure
For companies building or growing their presence in Asia, there is first the question of location. Out of the diverse and multiple business centres across the region, all at different stages in their development, how do you begin to decide where your facilities will be?
This is not a decision based around cost, but instead is about the business objectives, the need for robust infrastructure and transport links, available skilled workforce, tax issues, and the proximity of other business within your industry.
When all this has been taken into account, you can then begin to look at office space availability, real estate prices etc. and build the business case.
At the closing general session of this year’s Corenet Global Summit, Ayesha Khanna of Urban Intel talked to us about the rise of the smart city and how cities are using technology and innovative approaches to bring about a new era of urban development.
These so-called smart cities represent another dimension in CRE strategy as companies begin to consider the benefits of living in purpose-built or “intelligent” metropolis.
Singapore was cited as one such smart city, thanks to its integrated infrastructure that means much of the city is run on one data platform, for example, its traffic control system which means that there are very few serious delays in the city centre, which in turn means efficiency and time-saving.
As the number of ‘smart cities’ increases throughout Asia, we will see an emerging trend for MNCs to expect and demand a certain standard of “intelligence” in the cities in which they choose to locate.
War for talent and the workplace environment
Another increasingly important criteria for CRE strategists to take into consideration is the war for talent. At the Summit, several of the sessions looked at the link between HR and CRE and how it is increasingly important for them to work together for the good of the company.
Why? Because in order to attract the best talent to your company, you have to be able to offer them an attractive working environment in the city that they want to work in, in the location they want to work in.
Employee satisfaction is therefore intrinsically linked to a company’s profitability. In a post Global Financial Crisis world where budgets are tight and salaries and bonuses are still under scrutiny, employees are looking to other job perks to satisfy them.
There are two elements to this; some people are looking for better, more comfortable working environments within the office – for example, space, good light, high-tech facilities, break-out areas etc. to add to the sense of overall wellbeing in the workplace.
Others would prefer to not have a dedicated desk and instead to enjoy flexible working space and the option to work remotely to fit in with their lifestyle or work around family commitments.
Taking this one step further, Khanna also noted a change in the way people are approaching jobs in general. For example, there has been an increase in people choosing to freelance instead of being tied down by full-time employment, who will seek out shared office space with like-minded people.
In Singapore, we have seen a sharp increase in the number of shared office spaces for freelancers and start-up enterprises, who benefit from having a collaborative, creative working space, without having to commit to renting a whole unit.
CRE outlook for 2014/ 2015
These were just some of the key themes to come out of the CoreNet Global Asia Pacific Summit 2014 and there were many other interesting discussions taking place throughout the event; as an example, I haven’t even touched on the topic of sustainable buildings which is increasingly a “must-have” in CRE decision making.
Corporate real estate is a complex and multi-dimensional practice and one which, I predict, will influence CEOs more and more as the trends for urban development, smart cities, and multinational expansion continue into the next decade.
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Singapore Business Review. The author was not remunerated for this article.
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