According to international property consultant JLL’s survey, nine in ten CRE leaders believe that their plans to mitigate the impact of COVID-19 will be successful and have faith in their workforce to cope with the current crisis. A majority of leaders also expect total footprint and number of sites that they maintain to remain the same or even increase.
CRE leaders are now moving forward confidently in reimagining the new modern office, with a huge focus placed on prioritizing the health and wellness of employees, as well as leveraging technology in their investment plans.
In the report titled ‘Optimism in the Face of Crisis’, CRE leaders are highly positive about the future state of their business. Nearly 80% are confident they have the right CRE service partner to advise on next steps, and 70% are assured in their governments' ability to advise and take the right measures to mitigate future risk. Looking back at the effectiveness of their business continuity plans, CRE leaders expressed high levels of satisfaction, and 88% judged their plans to be effective, very effective or extremely effective.
While the majority (76%) of CRE leaders across the region expect only moderate impact or steady rationalization (i.e. expansion or contraction) of their real estate portfolios in response to changes arising from COVID-19, not all of them in Asia Pacific view this the same way. Those in Australia and Hong Kong are more focused on steady rationalization whereas leaders in India anticipate massive and accelerated rationalization. Despite the differences, half of all CRE leaders expect their total portfolio to stay the same in the medium to long term. Two-thirds of CRE leaders (63%) also expect their total number of locations or sites to stay the same.
"As the corporate sector prepares for normalcy amidst the pandemic, the high confidence from CRE leaders suggests immense opportunities as we redefine the future of the office. It is becoming apparent that this future must be one that considers the new reality occupiers exist in and the evolution of the office as a place for work. We anticipate CRE leaders to take these into the next phase of their decision making," says Anthony Couse, CEO of JLL Asia Pacific.
Moving into the post-pandemic era, JLL expects four implications for commercial real estate as CRE leaders look towards enabling success in this era of evolving change:
- Priorities for health and wellness will transform real estate portfolio mix to accommodate a more distributed and liquid workforce.
- A mix of CRE strategies will be needed to achieve the de-densification of office space.
- Technology will be critical in enabling the success of new working models.
- Higher acceptance of remote working will impact future CRE investment.
"COVID-19 has transformed the workplace overnight and how employers and employees both approach work. In response, CRE leaders have adopted various strategies to overcome these challenges. The future of the office is bright in the Asia Pacific, and we can expect that CRE leaders will be placing an even greater focus to ensure the safety and sustainability of the new modern office for all occupiers," commented Roddy Allan, Chief Research Officer of JLL Asia Pacific.