JLL: EMEA occupier markets stabilize as occupiers act with caution (EMEA)

Jones Lang LaSalle has published its Q4 2010 EMEA Occupier Conditions report, which reveals that occupiers remain cautious, pursuing only very select growth opportunities and essentially placing a focus on rationalization, consolidation or upgrading their existing estates.

Vincent Lottefier, CEO EMEA Corporate Solutions at Jones Lang LaSalle, said: "As development pipelines begin to run dry, it is the supply dynamic that has led to stabilization and in some cases, increases in prime rents. This means that CRE teams are no longer able to rely on underlying market dynamics as the route to achieving tough real estate cost saving targets. Instead CRE teams will be driven towards more strategic action that tackles the very culture underpinning the procurement and utilization of space."

Vincent continued: "We have already seen such strategic intent rise up the CRE agenda. A step-change in CRE behaviors is the likely legacy of the global financial crisis and the recovery of the region's real estate markets. This step-change encompasses both behavioral and structural modifications."

Jones Lang LaSalle's EMEA Occupier Conditions research highlights that best in class CRE teams will:

• Focus less on tactical real estate and more on strategic, needle shifting initiatives which challenge the very culture of real estate use within the business.
• Drive stronger engagement with a more receptive C-suite and senior management audience.
• Deliver better, more accurate and timely reporting on the corporate real estate portfolio to these decision makers.
• Move from a position of being 'order taker' towards a profile of strategic advisor to the internal business with an associated capacity to challenge conventional real estate thinking within the business.
• Manage the twin pressures of enabling selective growth whilst simultaneously continuing to right-size the portfolio.

Dr Lee Elliott Head of EMEA Occupier Research at Jones Lang LaSalle, added: "There are significant behavioral modifications that will challenge many in the industry and require open-mindedness and necessitate access to a wider skill and experience set. As such, the very structure of the CRE function will also be subject to modification."

Vincent Lottefier concluded; "In 2011 we will see the rethinking and redesign of the internal CRE team structure to enable teams to flourish. There will also be greater engagement with the outsourced service provider market. CRE teams will seek assistance from the market for tactical real estate actions and also for strategic support and access to a wider range of skills and expertise. We anticipate a growing maturity in outsourcing relationships particularly from EMEA domiciled corporates."

Source: Jones Lang LaSalle

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