Chinese firms are increasingly embedding corporate real estate (CRE) strategies into their businesses and embracing outsourcing, mirroring overseas trends in response to organic growth, M&A activity and cost pressures, according to a new survey published today by Jones Lang LaSalle.
The survey, titled The Dragon is Stirring, highlighted that the most influential factors shaping CRE strategies in China are cost pressure (53 percent) and organic growth (47 percent). It noted that 93 percent of firms expect to grow their real estate portfolio in China, and 15 percent of those also anticipate international expansion.
Where firms are present abroad, 13 percent have a foothold in South East Asia (16 percent targeting), 11 percent are in Australia and North America (13 percent and 19 percent targeting respectively) and 13 percent are targeting Europe.
Future location decisions in China will be driven by business criteria (50 percent), incentives (42 percent) and costs (38 percent). More than half (53 percent) are considering strategies that enable mobile working to increase productivity and improve workspace utilisation (50 percent) and to attract and retain talent (32 percent).
The report also noted a forthcoming dramatic shift toward outsourcing – 70 percent are considering adopting a mix of in-house and outsourced CRE delivery within three years, while a further 10 percent are considering fully outsourced delivery from none in 2011.
CRE structures are gradually transforming, according to the report. A quarter of firms surveyed have established a dedicated CRE department and more than half have a CRE strategy in place today
John Forrest, CEO of Corporate Solutions, Asia Pacific at Jones Lang LaSalle said: “Large Chinese corporations are recognising that strategic real estate management can positively impact their business productivity, from cost control to employee satisfaction and brand image. Domestic and overseas expansion plans are the most powerful drivers shaping CRE structures and strategies. Looking ahead we expect to see CRE play an increasingly pivotal role as more Chinese firms will have strategies in place, more will have dedicated CRE teams and the C-suite will engage further.”
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