(Y)OUR SPACE Q3 2022
THE KNIGHT FRANK CRESA CORPORATE REAL ESTATE SENTIMENT INDEXAfter the challenges of 2020 and the ensuing debate about the future of the office, our latest survey of almost 400 global occupiers confirms that they continue to see real business benefit accruing from real estate. It also shows, however, that there is a clear and increasingly urgent requirement for the form and function of the office to evolve as the pandemic recedes and the opportunity to ‘build back better’ presents itself to business leaders. The majority of survey respondents, armed with the lessons obtained from the great global workplace experiment of the last year, have confirmed that they will embark on a rigorous reconfiguration of their global portfolios and a remodeling of their workplaces over the next three years. New strategies will have workplace safety, sustainability and smart technology at their heart. Across global real estate markets, businesses will gravitate towards offices that are more user-centric; reduce environmental impact and support corporate ambitions or requirements around ESG; and which utilize technology and the data it generates to measure, manage and curate what will be a more dynamic workplace environment and experience. This transformation is not without challenge, not least because of the fragile operating environment and cost-consciousness apparent as we emerge from the pandemic. Exposure to expertise and global best practice is essential if these challenges are to be met and the transformation achieved. We are here to provide you with that expertise, advice and support. We have made significant further investments in our Global Occupier Strategy & Solutions service line since the first edition of (Y)OUR SPACE back in 2018. We have strengthened our consultancy teams to supplement our best-in-class transactional teams operating within and across global markets.
EXECUTIVE SUMMARY OF Q3 FINDINGS
- 129 corporate real estate leaders responded to our latest Q3 survey, conducted between the 3rd and 14 th October 2022.
- 78% of all respondents operate at a regional or global level.
- Q3 sentiment turned negative amid a worsening macroeconomic and operating environment, with the index falling by 5.5% q on q to stand at 33.12 (with a score below 36 representing negative sentiment).
- All three sub-indices that comprise the main index measuring growth, portfolio and workplace dynamics trended downwards q-on-q and all now show negative sentiment by recording scores below 12.
- Prospects for global economic growth softened further in Q3 as did company growth indicators, although revenue, capital expenditure and headcount growth remain in positive territory.
- Sentiment relating to portfolio dynamics is also trending negative. Respondents show little immediate appetite for relocations or offshoring, whilst the expansion of physical footprints is off the agenda for the large majority.
- Q3 survey results show low respondent expectation of getting back to pre-pandemic levels of occupancy, although enhancing workplace services, amenities and design continues to be a focus in order to bolster utilization.
- Survey respondents operating at a regional level tend to have more positive sentiment around future dynamics, particularly in relation to portfolio and workplace dynamics. Global respondents are most positive about the growth dynamic.
- There is clear variance in sentiment by industry sector. 70% of our Q3 respondents were drawn from four sectors tech & media, financial services, professional services and business services. Professional service firms were most positive about future growth and workplace dynamics, whilst financial service firms were most negative about portfolio dynamics.
Please download to read the full Q3 report.