Elevating to excellence – global corporate real estate trends 2015June 26, 2015 / By
JLL’s third biennial Global Corporate Real Estate Trends report – Elevate to Excellence – is hot off the press and provides a glimpse of the current state and future direction of corporate real estate (CRE). The report reveals that some trends first reported in Risks Ahead: Global Corporate Real Estate Trends 2013 have continued or intensified. It finds that:
- CRE teams are increasingly global, centralised, and empowered. 73% say that their mandate is stronger or much stronger than three years ago. Similarly, over half (57%) report into the C-suite (57%).
- Integration with other corporate functions is viewed as a growing need – but not prevalent. Shared services integration, of which there were high expectations in 2013, is not happening as fast as expected. On the other hand, 70% state that procurement is involved in CRE decisions.
- CRE teams are experiencing a ‘pressure cooker’ of expectations. CRE is experiencing increasing demands across both tactical (reducing costs, increasing density) and strategic (supporting flexible working, enhancing productivity) activities. In fact, across 14 out of 19 tasks surveyed, respondents reported increasing demands from corporate leadership. If we look at the 10 tasks we asked about in 2013 as well, even higher percentages report increasing demands in 2015. Perhaps unsurprisingly, we also see an uptick of participants who feel ill-equipped to handle these demands (from 7 to 15%) and a slight decline in those feeling well-equipped. While these changes are small, they reflect the challenging environment that CRE is currently operating in.
- As pressure grows, CRE teams are increasingly using outsourced service providers across the CRE life cycle. Respondents predict increases in levels of outsourcing in three years’ time. Across the range of services we tested, we still see the highest levels of current and predicted outsourcing in transactional and tactical areas, with more strategic functions (e.g. portfolio strategy) kept in-house.
How can CRE teams deliver on their increasing demands and elevate to true excellence? The report identifies two areas of focus: data and analytics and relationships with the broader business, both of which were identified as the top constraints hindering CRE (see graphic). These findings were confirmed by feedback from the audience at JLL’s session at CoreNet’s Asia Pacific summit in Hong Kong in March 2015. There, 38% of respondents stated that ‘access to data and analytics’ is where their teams are most constrained, followed by 30% who cite CRE integration with core business units as a constraint.
What are the top three constraints that are hindering CRE from enhancing itself as a Strategic value-add to your organisation?
Our call to action: CRE can move up the value curve by focusing on prioritising people skills ahead of technical, property-focused skills; creating a strong data and analytics platform to bring ‘science’ to CRE; agreeing what excellence looks like for a modern CRE function; and leveraging vendors to extend strategic capabilities.
For more, see: Elevate to Excellence: Global Corporate Real Estate Trends 2015.
More on 'Office' in 'Global'
- The post-pandemic new normal around the worldAugust 15, 2023
- Global corporate real estate outsourcing experiences a tectonic shiftApril 8, 2019
- Empowering employees through choiceAugust 2, 2017
- The new science of citiesJuly 26, 2017
- How big could Chinese outbound capital be?November 9, 2016