what occupiers want - occupier metrics...talent availability is clearly the upcoming driver when...
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What Occupiers WantBridging the gap between aspiration and reality
ContentsSurvey approach and respondents 3
Location 4
Building 6
Workplace 8
Conclusions 10
Industry
0-25
Pharma
>75
Financial Services
36-55
Construction and Architecture
Business Services
26-35
Real Estate
Public Sector
56-75
TMT
Industry
Other
152 respondents by sector
Portfolio size by interest
Bridging the gap between aspiration and reality
2 What Occupiers Want
Introduction
DTZ and CoreNet Global conducted a major survey with corporate occupiers on what drives their decision making in three key areas:
• Location• Building• Workplace.
The survey focused on both inspirational and strategic drivers as well as practical, decision-making factors. The 154 respondents were predominantly from large global or regional organisations with over 75% occupying properties in more than 25 locations and 50% occupying properties in more than 75. All industry sectors were well represented.
This survey is essentially a health check, exploring where the industry is in its quest to elevate the debate from cost to value. It indicates that there is still a major gap to bridge between aspiration and reality.
Tamás PolsterSenior Director Head of Consulting, EMEA
71%18%
11%Multinational: 74%National: 26%
70% of respondents with more than 25 locations
A significant response pool across industry sectors
Strong representation of US headquartered multinationals
3What Occupiers Want
Location
Despite aspirations cost remains a key driver in practice For occupiers across EMEA cost remains the key decision driver in location strategies for 56% of the respondents. This is much higher than in Asia Pacific (31%) and North America (19%). When asked about practical decision drivers, cost is stated as the most important criteria in Europe and Asia Pacific, and second most important in North America. This clearly illustrates the gap between aspirations and reality in location selection.
Sector preferences drive location decisionsTalent availability is clearly the upcoming driver when selecting a location, both in an international and metro strategy context. The search for talent is also pushing an increasing number of corporates back to urban areas. Over 70% of occupiers identify urban areas as their preferred locations. This confirms the results of a previous survey that DTZ conducted with CoreNet Global on ‘Urban Relocation’ where 63% of respondents said that they were currently relocating from suburban locations to core urban areas or planning to do so in the short term.
Whilst Central Business Districts (CBD) remain the overall favourite ‘creative urban areas’ are mentioned by an increasing number of occupiers. Visit www.dtz.com/research to read DTZ’s Coworking Revolution report, which looks at coworking and the rise of creative urban environments.
Location preferences differ by sector. TMT (Technology, Media, Telecommunications) is an early adopter of creative urban environments, but pharmaceutical and industrial companies still favour out of town business parks, providing proximity to their production sites. However, this is a likely barrier to recruitment and retention of talent.
Central Business Districts (CBD)CBD locations are preferred across sectors (by 48% of respondents)
Creative Urban EnvironmentsCreative urban environments are popular with TMT, industrial and construction sectors
Suburban Business ParksIndustrial and pharmaceutical occupiers favour suburban business parks
Preferred location
North America
47% 18% 28%
Asia Pacific
36% 36% 18%
EMEA
50% 22% 22%
4 What Occupiers Want
19%North America
56%EMEA
31%Asia Pacific
1. Talent availability 2. Cost 3. Accessibility 4. Market dynamics 5. Metro plans
1. Cost 2. Talent availability 3. Market dynamics 4. Accessibility 5. Competitors
1. Cost 2. Accessibility 3. Market dynamics 4. Talent availability 5. Competitors
The cost paradigm: Only 32% of respondents claim cost is a key real estate decision driver. However, it remains the most important location driver in EMEA and Asia Pacific, and the second in North America
Talent availability and accessibility: Are the upcoming location drivers, especially in North America
Urban development plans: Are closely monitored by North American occupiers
Cost as a key decision driver by region
Top location drivers
57%North America
72%EMEA
73%Asia Pacific
Importance of a rail station located less than a 10 minute walk away
Top three elements for location
1. Image 2. Innovative environment 3. Eating facilities
1. Image 2. Main road 3. Eating facilities
1. Image 2. Innovative environment 3. Eating facilities
Reurbanisation: 70% prefer an urban location. Car use in N. America still sustains demand for suburban parks
Image: The ability of location to positively impact corporate image is key!
Innovative environments: Are increasingly sought after
5What Occupiers Want
Building
Looks matterOne of the very clear highlights of the survey was the overwhelming recognition of the building being a strong brand enhancer/enabler for 91% of the respondents. Whilst most occupiers are not adverse to multi tenanted buildings and have no request for a unique identity, most prefer contemporary steel and glass architecture.
Sustainability rating is a key request for 90% of respondents of North America, 72% of Asia Pacific and 66% of EMEA. 100% of occupiers require a fully air conditioned building.
91%
perceive the appearance of the building to be important or very important, with a third of respondents ranking appearance as very important.
Building a Brand
68% of respondents see visible signage as important or very important but...
Prepared to share
37% were not adverse to multi-tenant buildings, which would make inclusion of signage challenging and...
Unique Identity
Only 50% of respondents required buildings with a unique identity
6 What Occupiers Want
Whilst sustainability rating is a key aspiration, occupiers continue to prioritise full air-conditioning systems and strive for steel and glass structures
Sustainability
Sustainability rating is most important to North American occupiers with 94% putting an emphasis on BREEAM and LEED, compared to 66% in EMEA and 72% in Asia Pacific.
Contemporary steel and glass structures
Contemporary steel and glass structures were the preferred building type, particularly in North America with 55% of respondents compared to 43% in EMEA and 45% in Asia Pacific.
Naturally cooled buildings
Naturally cooled buildings are a definite ‘no go’ – 100% of respondents stated a requirement for air conditioning. 58% of North American respondents gave a preference for cooling controlled by floor segment .Very few respondents found cooling by floor acceptable (9%).
On-site food preparation
This is most important to occupiers in Asia Pacific (83%), nearly twice the number compared to North America and EMEA.
7What Occupiers Want
Workplace
A conservative approach for great aspirationsAll the respondents recognise that workplace is an important factor for attracting and retaining talent. Occupiers in Asia Pacific are markedly more concerned about this than their peers in North America and EMEA. Whilst the link to staff engagement is recognised, workplace practices remain very conservative and fall short of aspirations of providing a ‘great place to work’ for new talent. Over 75% of respondents’ acknowledge dedicating less than 25% of space to collaboration.
The TMT sector leads the workplace league with 63% of respondents recognising workplace as critical and 75% dedicating more than 15% of space to collaboration.
Industrial and pharmaceutical companies do not yet fully recognise the criticality of workplace.
Successful implementation varies by sector
% of respondents providing more than 15% of collaborative space
Workplace is a key talent retention factor as % of respondents
63%TMT
75%TMT
47%Business Services
59%Business Services
43%Energy & Utilities
43%Energy & Utilities
39%Financial Services
22%Financial Services
29%Public Sector
43%Public Sector
20%Industrial
50%Industrial
0%Pharmaceutical
40%Pharmaceutical
8 What Occupiers Want
46%North America
13.6North America
7,443North America
44%EMEA
12.4EMEA
8,400EMEA
73%Asia Pacific
10.2Asia Pacific
6,010Asia Pacific
1. Flexibility 2. Quality 3. Aligned with peers
1. Quality 2. Flexibility 3. Operability
1. Quality 2. Flexibility 3. Operability
Workplace as a very important talent retention factor
Key components of workplace
Share of collaborative space
Space utilisation per workstation (sq m, NIA)
Total Occupancy Cost Per Workstation (USD per annum)
Workplace is globally understood as a key talent retention factor with Asia Pacific ahead
Only 22% of respondents allow for more than 25% of collaborative space! That shows a very conservative approach in reality (25% is only 30 sq ft / workstation)
Source DTZ Research see also http://occupiermetrics.dtz.com
<10% 10-15% 16-25% >25%
58%
7% 35% 32% 26%
44% 55%
11% 18%44% 27%28% 36%17% 18%
9What Occupiers Want
Conclusions
Bridging the gap between aspirations and practiceIn line with the increased focus of global CEO’s on talent* the aspirations of the CRE industry have also started to shift towards a more value driven approach. However the reality of decision making is that it is often conservative and cost centric, especially around the building and workplace agenda.
Despite the apparent lack of a major breakthrough in workplace or building agendas, things have started to progress on the location front. Most occupiers realise that location is important for talent retention. A major shift is now taking place in the US to Europe with occupiers relocating to urban areas and increasingly looking for creative connected areas instead of traditional CBD’s. Suburban business parks are clearly out of favour for most sectors.
The industry is at a turning point of embracing a more value driven strategy. However, the economic climate of the next three years will be decisive if the industry wants to bridge the gap between aspiration and reality, and not return to a pure cost centric approach which might stifle progress.
Cost remains a key CRE driver despite aspirations
Branding is key both in location and building selection
Reurbanisation: 70% prefer an urban location
Sustainability ratings are sought, but without consequences
Innovative urban environments are increasingly sought after
Workplace is recognised as key in talent retention but practices are conservative
10 What Occupiers Want
11What Occupiers Want
For further information contact:
www.dtz.com
@DTZ_UK
Tamás PolsterHead of Consulting, EMEA+32 2 629 02 [email protected]
Liam NichollsAssociate Director, Global Occupier Services+44 (0)20 3296 [email protected]
Richard YorkeGlobal Head of Occupier Research +44 (0)20 3296 2319 [email protected]
©DTZ D082 02/15