_Where is APAC Corporate Real Estate Heading in 2022?

What issues are at the forefront of the minds of corporate real estate leaders in 2022? During Knight Frank's webinar, Mega Trendwatch: Where APAC CRE is headed in 2022, we were joined by Ben Miranda, Real Estate Portfolio Manager, Asia, Oceania for Shell, and Reen Salleh, APJ Workplace Strategy, Planning & Experience from HP Inc alongside Knight Frank’s Global Head of Occupier Research, Dr Lee Elliott in a panel moderated by Tim Armstrong, Global Head of Occupier Strategy and Solutions for Knight Frank.

In the panel, they discussed three frontiers that will shape CRE decision making:

Using the office to cultivate corporate culture and connection

Although the pandemic has made virtual working a necessity, according to Dr Lee Elliott, business leaders are growing somewhat frustrated with the inefficiencies of onboarding and managing people in a remote-first environment. However, now that workers have a greater choice as to where they work, leaders need to think about how to make the office a more compelling place to work to get people to “invest” in the commute.

As Dr Lee Elliott says: “We have to think about real estate beyond just the presentation of a physical environment… and actually start to create emotional, psychologically effective environments that actually support the types of behaviours that we want from office occupants."

Finding their (square) footing in the new world of work

Although headlines earlier in the pandemic predicted a significant downsize of corporate real estate portfolios in light of the big shift to remote work, Knight Frank’s (Y)OUR SPACE report showed that plans to decrease, increase, or keep total space in global portfolios over the next 3 years were quite even (at 35%, 30%, and 35% respectively), and at smaller magnitudes of change than predicted.

“The last 12 months have been very busy for me, not reducing space but looking at what quality space we can get as we come back,” says Ben Miranda.

So why aren’t we seeing office vacancies at the same level as the Global Financial Crisis? Reen Salleh points out that some businesses may not be able to immediately adopt a hybrid strategy, for example, due to inflexible spaces and the investment required to retrofit space.

Closing the gap between ambition and action on sustainability

“You’ve got to know where you start before you can journey to the end goal of net zero,” says Ben Miranda.
When polled, the audience agreed that developing better portfolio metrics was their primary sustainability focus, above over other activities like reducing in-operation carbon. However, there are challenges to that in the region, with some markets not having adequate metering to pull together accurate data sets.

Expect variability in occupier behaviour

Despite facing similar challenges, one thing Dr Lee Elliott notes is that there will be great variability in the decisions that occupiers will make for their real estate this year. “The central part of that difference,” he says, “will be much less about the building they occupy and [their] footprint, and much more about the experience within it.”

Watch the full webinar on-demand here.

If you'd like to reach out to our team, please reach out to tim.armstrong@asia.knightfrank.com.