A clear shift in behaviour is shaping current occupier decision making.  Businesses are increasingly seeking productive rather than cost effective workplaces that support, facilitate or portray wider strategic objectives. 

The harsh realities of the immediate post Global Financial Crisis (GFC) environment led to an all-out attack on real estate costs.  As the protection of margins and repair of corporate balance sheets became a corporate necessity, the majority of businesses turned their attention to real estate – which typically accounts for around 15% of operational costs.  The quantum of space occupied reduced rapidly while reconfigured workplaces sought to increase occupational density and utilisation.  Essentially the aim was to do more with less.  Although meeting immediate financial goals, the legacy of such actions has typically been unproductive and unsatisfactory working environments, which challenge talent attraction and retention and harm corporate competitiveness. 

A decade on and there are clear signs that occupier behaviour is changing.  While cost control remains a focus for many, it is no longer the driver of real estate strategy.  Failure to invest adequately in new technologies, facilities, capabilities or staff is not a viable option in such a disrupted and highly changeable operating environment.  This has led to more considered investment in real estate to support, facilitate or portray business transformation. In contrast to a decade ago, real estate is a corporate investment rather than a corporate cost.  

Indeed, in our recent survey of more than 120 global corporate real estate leaders, almost half have no annual real estate cost saving target or were pro-actively increasing real estate costs to support business growth.  Tellingly, only 10% of those surveyed have a real estate cost saving target in excess of 10% per annum.  The contrast with the recent past could not be stronger.

The result of this shift is a renewed focus on corporate productivity.  Occupiers are investing to heighten business efficiency, productivity and innovation rather than pursuing cost reduction strategies that ultimately limit personal productivity, stymie collective creativity and cost the business more in expensive staff churn than the savings achieved through a more frugal property spend.  

In this new push for productivity, the aim is to increase productivity by strengthening the interaction between people and property.  Corporate real estate strategies now seek to bolster productivity by increasing the attraction of the workplace, thus raising the utilisation and occupancy of the space, rather than by simply seeking more from less.   

Productive workplaces derive from the creation of a positive, serviced and well-supported workplace experience.  In the push for productivity the true value of human connection becomes recognised and better accommodated by making well-being, collaboration, creativity, experience, and productivity the foundations of workplace strategy.  The workplace shifts from simply a place in which to house people to become an engagement tool; a place that drives collaboration, supports transformation and the physical embodiment of wider corporate intent.  

For a further understanding of these dynamics, and case studies of companies that have used real estate to push increased productivity, take a closer look at (Y)OUR SPACE