Guest post by Adeline Liew, Director, Occupier Services, Knight Frank Asia-Pacific

While trends in workplaces continue to evolve and affect cities across the world, Asia-Pacific is diverging from the pack in its own ways. Here are some regional trends that we’ve noted through our research.

Insight 1: APAC corporates are still seeking to expand their global portfolio over the next three years, despite the impacts of COVID-19

When asked about expectations of change in their total amount of space in global portfolios, APAC respondents from our (Y)OUR SPACE 2021 global survey have been more bullish than their global counterparts. 30% more APAC respondents said that they are likely to increase rather than decrease space. Comparatively, global respondents were slightly more inclined to decrease rather than increase their portfolios.

This bullishness in strategy stems from better handling during the initial phases of the pandemic in 2020, with many developed APAC markets being global frontrunners in moving out of the COVID lockdowns. These positive sentiments are not uniform, however. Geographical and sectoral differences both play a difference, with performing sectors such as technology, life science, and e-commerce players most likely to expand their footprints, but sectors related to the old economy will be more conservative when rationalising their office requirements.

Insight 2: WFH will not have as lasting an impact on real estate strategy on APAC occupiers, compared to global

Globally, work-from-home or hybrid working has gained influence over 2020, with the pandemic forcing more businesses to operate away from offices. In the (Y)OUR SPACE 2021 survey results, a quarter of all respondents (25%) said that they expected COVID-19 to have a lasting influence on their real estate strategy.

Asia-Pacific occupiers are resisting these trends to an extent, however. Only 14% of the region’s respondents said that they expect the same lasting influence to impact their real estate strategies. This extends beyond the size of their portfolio and also on qualitative decisions made about it. While global occupiers are seeking to increase the amount of shared desks and workspaces and cut down on personal space provisions per person, a smaller proportion of APAC respondents are saying the same is likely to happen for them.

Insight 3: Relocation of APAC Corporate HQ Facilities will aim to achieve cost savings and talent acquisition

When asked what their likelihood of moving HQ facilities is in the next three years is, 38% of global respondents said that it was likely, very likely, or definite. The reason for these potential movements is largely attributed to two key drivers – achieving cost savings (59%) and the changing workstyle influencing quantum and quality of space required (54%).

Perhaps surprisingly, APAC respondents are showing even more eagerness to shift. Slightly more than half (51%) of them said that a move in the next three years is likely to happen, which is 13% greater than globally, and their priorities for doing so are different from the global average, too. While achieving cost savings is also as prevalent for them (66%), the access to a different talent pool is the next most cited reason (44%) for Asia-Pacific businesses.

Insight 4: Additional provision of amenities to curate better employee experience is paramount to occupiers

Talent acquisition and retention is now hinging more on curating a better workplace experience through providing better locations, amenities, and incentives. A pivot to a well-located, mixed-use development or one with such aspects in surrounding properties in their districts could achieve all these objectives. In the coming years, we expect to see a greater level of flight-to-quality.

When asked, 33% of APAC respondents said they were expecting to increase the number of amenities provided within their workplace, with 58% saying they expect it to remain the same, and 9% to decrease. These amenities refer to a broad ranging spectrum of provisions, but the top three types identified by APAC respondents are food and beverage offerings, healthcare facilities and gym facilities. These are all offerings expected from a retail development, and hence office-cum-retail assets will become more highly sought after going forward.

Insight 5: Decentralisation of HQs is a strategic tool for talent attraction by offering workers closer proximity to workplaces

As mentioned earlier, a significant portion of APAC corporates are considering relocating their HQs to access different talent pools and achieve cost savings. However, the question remains as to where they are going. To answer this question, we look beyond the (Y)OUR SPACE 2021 results.

Pre-COVID, many developing APAC cities have been facing the problem of long commute times and a lack of parking space due to rapid economic development, population growth, and urbanisation. Even when work-from-home no longer becomes a necessity, many employees will not be able to fathom going back to a two-hour daily commute to centralised HQs.  

A Hub-and-Spoke Rebalancing Model could address some traffic concerns while acting as a strategic tool for talent attraction by offering workers closer proximity to their work.

The Bottom Line

While these trends present challenges to the status quo, opportunities have also arisen as a result. Astute businesses located in Asia-Pacific could take this opportunity to relocate their HQs now to achieve higher cost savings, capitalising on weaker sentiment based on the current office recovery trajectory. There is also an opportunity to build better workplace experiences through amenities which take care of employee wellbeing or by seeking hub and spoke locations which optimise their position in the war for talent.

About the author:

Adeline Liew, Director, Occupier Services, Knight Frank Asia-Pacific

Adeline is a Director for Knight Frank’s Occupier Services & Commercial Agency for the Asia Pacific Region. With a passion for the corporate real estate arena, she focuses on strategising, implementing and driving business initiatives across the APAC region.

With a keen eye on market trends, Adeline understands the significance of data centres in today’s market. This is why she is the APAC Lead for data centres, specialising in the rising dominance in the market. From Hyperscalers to Colocation, Adeline understands the wide spectrum of key issues pertaining to the data centre arena. As a certified Data Centre Practitioner (DCP), Adeline helps Knight Frank’s clients crystallise their site selection (greenfield /brownfield) in relation to their needs.

Adeline serves as Vice Chair for CoreNet Singapore Chapter and sits on CoreNet’s Global Board for Young Leaders. She also mentors up and coming women in the real estate industry.