Strong signs of economic growth
According to the latest annual European Occupier Survey conducted by CBRE, generic the world?s largest commercial real estate services company, corporate real estate decision makers across Europe are responding to signs of an economic upturn by shifting focus away from pure cost management to future opportunities for growth.
The survey shows that representatives of global corporations, which collectively occupy approximately 250 million sq m worldwide, have increased confidence in the recovery. While in 2012 70% of them reported that the uncertain economic outlook in Europe was a key factor in their real estate strategy, in 2013 less than half (46%) identified weak economies as a concern. Yet despite positive signs, cost control remains a priority. The survey shows almost three quarters had renegotiated leases in the past twelve months in order to take advantage low office rents, compared to 45% in 2012. CBRE experts expect that as the recovery continues, the drive to reduce costs is likely to diminish.
Daniel Bienias (photo), Head of Tenant Representation and BPO Services, CBRE in Poland:
?We are seeing that the mood among tenants is definitely picking up. Even though we are a long way away from the excessive optimism of 2007, there seems to be a consensus that things are looking better for the economy as a whole. This also translates into corporate attitudes. One of the driving forces of the office space market are frequent mergers and acquisitions. It must also be noted that while some sectors are looking decidedly bullish, the situation in others is less than rosy.?
Daniel Bienias added
?The service sector has been expanding for the past few years and therefore needs more space ? especially IT, BPO and shared services companies, which are declaring future demand as well. There is also significant demand for modern offices from erstwhile start-ups, which are now maturing. Meanwhile media and print companies are scaling back and looking at costs and companies from the banking and financial sector are aiming to consolidate their branches and renegotiate their current lease agreements.?
In addition, strategies for optimizing space are important for the group of occupiers surveyed. This is due to the need to balance cost savings (reported by 56% as a key driver of alternative workplace strategies) with providing a collaborative working environment (39%) and improving employee productivity (37%). This leads to companies placing greater emphasis on providing staff with the right environment in the right locations. Although 85% name cost as the principal factor for choosing office space, 45% of companies report that they see the quality of their workspace as integral to attracting and retaining talent. Also important are public transport accessibility, on-site gym or restaurant and flexible workspace. Overall, the results indicate that for occupiers, a central, amenity-rich location which provides lifestyle options for the employees outside the work environment is crucial.
Jonathan Steer, Director, Building Consultancy at CBRE in Poland:
?There is a lot of interest from the pharmaceutical and banking sectors as well as new business sectors in developing the right workplace strategy that meets the needs of their own particular organization and staff. As competition between companies for qualified staff increases, the working environment for an employee can be a deciding factor. For the employers the principal benefit is a tailor-made work environment for their organization which provides the flexibility to meet their future needs. The combination of these drivers is resulting in a high level of demand for our Workplace Consultancy Services.?
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