In its inaugural Asia Pacific Occupier Survey, CBRE revealed that Asia Pacific remains a key growth market for multinational companies but the economic slowdown in China is likely to see businesses be more cautious in regards to future expansion plans.
“Asia Pacific’s economic growth still outpaces EMEA and the Americas. Despite the short-term volatility and softening business sentiment, the medium to long-term outlook looks positive for the region, and still provides opportunities for multinational companies,” Dr Henry Chin, head of research, CBRE Asia Pacific, explained in a press release. “Southeast Asia and India will be the main focus of portfolio growth driven by solid economic growth and rapid demographic changes in these markets. Companies remain positive towards expansion in China but it will be relatively moderate in the coming years.”
Cost management and employee engagement are key issues for multinational corporations but they still retain strong hiring intentions and 42 percent of CRE (commercial real estate) executives told CBRE that they plan to increase their regional headcount between now and 2020 despite current market challenges.
“In light of the ongoing economic slowdown and financial market instability, occupiers will need to manage short-term economic volatility when formulating their CRE strategies,” Dr. Chin stated. “And with a more cautious approach to business expansion, we expect multinationals to focus more on optimizing their existing portfolios, for example through cost control and talent management, rather than expanding their footprint.”
When it comes to selecting an office space, real estate costs were the top priority, and this, along with the more cautious approach to expansion, is helping chart portfolio strategies and location choice according to the Asia Pacific Occupier Survey. Space efficiency is the most popular way for multinational corporations to reduced occupancy costs while workplace strategy that improves collaboration with customers, colleagues and coworkers is also becoming more important.
“Many multinationals initially implemented workplace strategy as a means to improve space utilization with the aim of reducing costs. However, this way of thinking is now changing, as more companies look to strike a balance between reducing costs, improving productivity and enhancing the overall work experience for employees,” Phil Rowland, chief executive officer, Global Workplace Solutions, CBRE Asia Pacific, noted.
