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News release

SYDNEY

Corporate Australia wants more value from its real estate assets: JLL Survey

The GFC has transformed the corporate workplace. The new agenda for teams managing real estate assets has gone beyond cost savings to creating value via workplace strategies such as increased remote and mobile working and ABW


AUSTRALIA, WEDNESDAY 22  MAY 2013 – Senior corporate leaders in Australia have higher expectations for their real estate portfolio assets than the rest of the world, giving higher ratings to strategies like the move to greater remote and mobile working, enhanced workplace productivity and flexibility and transforming the quality of workspaces.

JLL’s second biennial report on Global Corporate Real Estate Trends, released today in Melbourne, found Australian respondents reported a high focus (78%) from senior leaders on enabling remote or mobile working for their employees.  This was one of the top demands being placed on Corporate Real Estate (CRE) teams and was more than 20% higher than respondents globally (55% global average).

CHART 1: The changing demands of senior leadership
Q: How are the demands of senior leadership / the C-Suite on the CRE team changing in terms of the following areas?

 


Source: Jones Lang LaSalle Global Corporate Real Estate Survey 2012.

Australian Head of Corporate Solutions Integrated Portfolio Services, Tony Wyllie said the survey found that over the past 3 years, Australian corporate leaders have demanded more productivity gains from workplace assets, increasing quality and flexibility of the workspace, at higher levels than the rest of the world.
 
“There is an increased focus by corporate Australia on workplace strategy.

“Cost cutting was the focus following the GFC, but this has now become business as usual.  The GFC has led to a transformation of the corporate workplace and no better has this been demonstrated than in the Australian results of the survey.
 
“In Australia, 20% of organisations put their workplace strategy plans on hold during the GFC due to financial constraints. But now, organisations have recognised that workplace has a role to play in creating efficiencies, cost savings, productivity gains and all the positive benefits to the organisation, such as talent attraction and retention,” said Mr Wyllie.
 
The Survey, involving more than 630 corporate real estate executives in 39 countries, (52 respondents in Australia) found the overwhelming majority of Australian respondents (53%) reported being more risk averse today than they were in 2010 when the first JLL survey was undertaken.
 
Only 29% of corporates surveyed in Australia said they expected to increase the size of their portfolio over the next three years, compared to the result of the first survey in 2010, which found 51% were expecting growth in their portfolio.
 
CHART 2: Global real estate portfolio growth expectations by Australian companies: 2010 vs 2012
 


Mr Wyllie said, “The GFC left a number of long-lasting legacies – the drive for cost efficiency, a heightened risk aversion, greater transparency of data for decision making, as well as elevating the role of corporate real estate (CRE) teams within the organisation as a key influencer.
 
“The current drive towards improved utilisation of the workplace and driving up densities with strategies such as Activity Based Working (ABW) demonstrates the new CRE agenda in Australia.  Cost savings are now business as usual and the C-suite is demanding more from real estate teams.
 
“Having been through some of the most challenging economic times in recent history, we believe corporate real estate (CRE) is at the crossroads. Like many other industry sectors, the GFC forced the hand of CRE Executives the world over to have an unrelenting focus on cost. During the GFC, CRE delivered its fair share of costs savings and cost avoidance within corporate Australia.
 
“Now, in a post GFC environment, cost efficiency is here to stay. But today CRE finds itself tasked by the C-suite to shift the focus from cost to value creation and having to deliver on both sides of the cost versus value equation,” concluded Mr Wyllie.
 
Since the last JLL Corporate Real Estate survey, which was taken in 2010, when he world was still feeling the full effects of the GFC, a number of things had changed in the 2012 survey results:
1. There is a heightened degree of risk aversion in CRE, like most of corporate Australia
2. There is a greater demand for short-term tactical strategies that are largely focused on cost
3. There is increasing demand for longer-term focus on value creation
 
As a result of these changes between the 2010 and 2012 Surveys, the Australian Survey Report, titled ‘Corporate Real Estate at a Crossroads: Cost vs Value’ outlines 4 key strategies to achieve this change in focus from cost to value creation and having to deliver on both sides of the cost versus value equation.
1. CRE Alignment – Create real estate strategies that connect with corporate objectives. 52% of respondents described the alignment between corporate and real estate strategies as being entirely aligned, with this proportion predicted to grow to 82% over the next 3 years;
2. Driving Productivity Gains – Define and establish a productivity framework that directly aligns with corporate objectives and is agreed by the C-suite, to meet the changing demands and focus from senior leadership;
3. CRE Preparedness and Barriers to Success – The requirement to shift the focus to value creation, as well as deliver on cost metrics.  Only 30% of respondents felt they were well equipped to meet all demands of the C-suite, with 62% stating they could meet most demands;
4. Big Data – Ensure real estate decisions are made using real time, accurate data.  Only 22% of respondents stated they had everything they needed to extract real estate metrics.