CoreNet Global's new 2012 State of the Industry Report takes a sweeping view of corporate real estate (CRE) in a redefined world.
The report, released to 7,000 CoreNet Global members worldwide, captures many of the diverse, assorted, wide-ranging, often-conflicting and extensive factors shaping tomorrow's global business landscape.
Key findings include:
- Even with mobility and telework, employees today prefer to work in the office
- The potential of cloud computing is over-estimated
- There is finally a standard for reliably measuring sustainable practices
- The global economy is the biggest issue facing multinational companies and their corporate real estate executives.
"No guts, no glory," is how one industry executive describes the current mix.
While the report offers ample evidence that the economic climate for corporate occupiers and supply side commercial real estate service providers is improving and that 2011 was a fairly positive year for the industry, a sense of caution prevails.
"These and other developments may very well represent the outer tendrils of better times ahead for the industry," the report notes. "Yet the always-present reality of cost cutting could mean that the tightest spending controls we've ever seen may still lie ahead."
"The global economy is one of the biggest issues we're impacted by," said Jim Scannell, CoreNet Global Chairman-elect and Senior Vice President, Administrative Services for the Travellers Companies, Inc.
Uncertainty can be equated to the unevenness of the global economy, report author Richard Kadzis observes.
"Some regions are more viable for corporate investment and growth than others," said Kadzis, Editor of LEADER Magazine, CoreNet Global's professional journal.
Countries like Brazil, India, Malaysia, Russia and even Vietnam are well positioned for strong growth in the coming months, while China, often viewed as the world's hottest growth market, will see a cooling off from 10% or better GNP growth to 5-6% in the coming year.
But the more mature economies of the Western world, especially the US and throughout Europe, will "face a day of reckoning" because of sovereign debt, deficit and leadership issues, the report indicates.
"No guts, no glory should be the slogan for the months ahead," as Thomas Glatte, Head of Global Real Estate for BASF, views the current situation. "As past experience has proven, caution will prevail for most companies. We will see a slow-down in major investment decisions and a substantial rise in ongoing project reviews or delays."
Globally, the scales have tipped in favor of Asia. "The global shift of business-attention toward the big, emerging markets in Asia is a huge factor," Glatte stressed.
The CoreNet Global 2012 State of the Industry Report also underscores how corporate real estate executives hold sway over key business drivers like talent, innovation, productivity, speed to market and sustainability.
There's an in-depth examination of how emerging work strategies are changing the workplace, and how the economy has increased the adoption of alternative and flexible work strategies now also linked to real-estate-compression trends. For example, space per person already averages 100 ft² or less in Europe, and data show the same will be case for 40% of companies in North America by 2017. Companies are using less office and work space, but they are making it more inviting, open, progressive and collaborative.
Largely due to the economy, "What started out in the 2009 recession as a real estate strategy has quickly become an overall business strategy," the report relates.
Yet even with more people than ever being allowed to work from home or other places outside the office, more of them prefer to go to the office. Another key finding with dismal job creation statistics, it's almost as if workers' job security outweighs the allure and flexibility of mobile work, 2011 research performed by CoreNet Global and Steelcase finds.
- 70% of employees regard the o