(Y)OUR SPACE Q4 2022
THE KNIGHT FRANK CRESA CORPORATE REAL ESTATE SENTIMENT INDEX
The changing macro-economic conditions are bringing new operational realities to the fore. This will form that backdrop for future corporate real estate strategy and activity. With this in mind, we wanted to regularly test the temperature of corporate real estate professionals via an industry-first sentiment survey.
The Knight Frank Cresa Corporate Real Estate Sentiment Index is a simple 12 question on-line survey conducted quarterly that gauges sentiment in relation to three areas – growth, portfolio and workplace dynamics.
EXECUTIVE SUMMARY OF Q4 FINDINGS
- 118 corporate real estate leaders responded to our latest Q4 survey, conducted between the 11th and 27th January 2023.
- 75% of all respondents operate at a regional or global level.
- Q4 sentiment trended downwards amid a worsening macro-economic and operating environment, with the index falling by 2.6% q-on-q to stand at 31.59 (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 recoding scores below 12.
- Sentiment around prospects for global economic growth over the next six months improved marginally in Q4 but remained negative, echoing wider macro-analysis which points to a flatter and shorter global downturn.
- However, the gap between global economic sentiment and corporate performance closed during Q4 with expectations around corporate revenue, capital expenditure and headcount growth all falling q-on-q, with the last two recording negative sentiment with scores below 3.
- Sentiment relating to portfolio dynamics fell by just 0.17 q-on-q, suggesting that respondents are becoming more attuned to the future prospects for change at a portfolio level. Sentiment relating to future offshoring did trend upwards marginally q-on-q.
- In terms of workplace dynamics, intervention here appears to be more constrained over the next six months – perhaps as a function of reduced growth in capital expenditure budgets – with the sub-index falling by 2.2% q-on-q. All four indicators within the sub-index now show negative sentiment with scores below 3. Once again sentiment around the potential return to pre-pandemic levels of occupancy remains the lowest across the whole survey, suggesting that new baselines will be set around future office occupancy levels.
- The sentiment index is calculated on average scores across the entire sample population. In this executive summary, pages 7 & 8 illustrate the breadth of opinion in relation to future portfolio and workplace dynamics and identifies where the balance of opinion is and which issues are most polarizing for CRE professionals presently.
Please download to read the full Q4 report.