Occupier_News_Q2_UK_v3

Co-working Report

The Occupier Edge Fourth Edition

Corporate Co-working continues to be the most transformational trend in the workplace. The environment, amenities, cost savings and flexibility that Co-working space offers makes a great case for all kinds of occupiers including small businesses, start-ups and larger companies. With the demand growing at 10-15% on average per annum across all regions, the size of Co-working space is estimated to be at its prime.

The Occupier Edge provides strategic, actionable thought leadership crafted by our very own future thinking Cushman & Wakefield experts. This edition of The Occupier Edge features articles addressing influential trends impacting the commercial real estate industry and beyond. A few key topics include gamification and how it transforms the way we work; how artificial intelligence is no longer a concept, but rather a reality in the workplace; the top-trending topic, gig economy, which has created a new kind of diversity, with full-time permanent employees working side-by-side with freelancers and much more.

Co-workinghasbeen themost transformationalpractice in the workplace in recent years. It isgoingmainstream ingateway markets across regions asprime rents continue to soar. Co-working Understanding the Ongoing Evolution APRIL2017

SURVEYRESULTS 2016

GATEWAYCITIES /REGIONALFINANCIAL CENTERSAREPREFERREDGROWTHMARKETS

NewYorkCity

Riode Janeiro

38%

EUROPE

68%

NORTH AMERICA

21%

MIDDLE EAST

17%

Johannesburg

London

53%

ASIA PACIFIC

AFRICA

27%

CENTRALAND SOUTHAMERICA

Dubai

Shanghai

REALESTATECOSTSCONTINUETOREMAIN AMAJORFACTORFORORGANIZATIONS

92% say totalproperty costs are important. 80% say lease length is important.

63% consider regulations will impact their location strategies 25%ONLY consider signing a long term lease and lock- in apreferential rate duringuncertain times

BankingSector concerned about PROPERTYCOST

TechnologySector is concerned about LEASELENGTH

COSTCONTAININGREALESTATESTRATEGY ISHIGHLYPREFERREDBYCRELEADERS

ProfessionalServices

Banking

>50% have alreadybegun forming solutions to tackle rising rents

MOSTSENSITIVE TORISINGRENTS 65% alreadyhaveplans to tackle rising rents

COSTSNOTA MAJORFACTOR ONLY 12% - focusedon cost containment

GATEWAYCITIES /REGIONALFINANCIAL CENTERSAREPREFERREDGROWTHMARKETS

44 % Don’tmove, remainwhereyou are. Mostoccupierswant to remainwhere they are as relocation costs are still high inmostmarkets

40 % Chooseefficient andflexibleworkspaces. Occupiers are looking for efficient andflexible workspaces considering lease length and property costs as important factors

STRATEGIESFOREFFICIENTLYMANAGINGFOOTPRINT

Increase efficiencyby offeringflexibility 92%

Invest in technology to enableflexibility 89%

Lease Co-working space 54%

You aremost likely toutilize co-working space, if you are exploringbusiness opportunities in ASIA PACIFIC

BUSINESSSECTORS MOSTLIKELYTOUSE CO-WORKINGFACILITIES

As of June 15, there have been 2,664 downloads of the publication.

CO-WORKING: UNDERSTANDINGTHEONGOINGEVOLUTION

Professional Services

Technology

Banking

CO-WORKINGCONCEPT ASACOSTCONTAINMENT STRATEGY Most respondentshave indicated that theneed for major changes in their current footprint isnotpar- ticularly exigent,butwill consider adoptingflexible workplace strategies toutilize existing spacemore efficiently.They are alsowilling to invest in tech- nologies to enableflexibleworking environments. Several respondents areopen to leasing short term overflow space and even consolidating their foot- prints. More thanhalfof theCREmanagers are also interested in incorporatingCo-working solutions into theirCRE strategies.Co-working spaces are 10-30% cheaper as compared to traditionaloffice spaces inmanymarkets. In some locationswhere theyhave expanded, they arewilling tooffer tenant incentives inorder tofillup spaces.For thosewilling to exploreCo-working spaces,pursu- ingopportunisticgrowthover thenext 12months serves as themost importantmotivation (63%).At the same time,more thanhalfof all respondents are also expecting somepotential cost savings in high cost locations. Nuances exist acrossgeographies that aremost likely to embrace theCo-working concept.Those based in theAsiaPacific (70%) aremost likely to useCo-working space as itgives them theflexibil- ity to exploregrowthopportunitieswithoutbeing encumberedby long-term space commitments. TheTechnology,Media/Entertainment, andProfes- sionalServices sectors,whichusually emphasize teamwork and collaboration in theworkspace, are themostwilling to adopt thispractice. Co-working Understanding the Ongoing Evolution APRIL2017

CO-WORKINGFEATURES MOSTPREFERREDBYCRELEADERS

APPEALSOFCO-WORKING

4.5

4.4

4.4

4.4

89 %

70 %

67 %

55 %

PRIVACY SECURITY

VARIETYOF WORKSETTINGS

OPEN CONCEPT

STAFF PREFERENCE

AMENITIES

COST

SCALABILITY

FLEXIHOURS

ACUSHMAN&WAKEFIELD RESEARCHPUBLICATION

87%CRE leaderswant toadoptworksettings thatsupport thewaystaffwork

CO-WORKINGPREFERENCES

45% CBD locations aremost preferred,butmost are willing to exploreother locations too

50% short term leases

34% areopen to 7-12 month leases

(<=6months) arepreferred

*Note - all% values indicate thepercentageof respondents

CoreNetGlobal is anon-profit association,headquartered in the US, representing almost 10,000 executives in50 countrieswith strategic responsibility for the real estate assetsof large corporations. Theorganization’smission is to advance thepracticeof corporate real estate throughprofessional developmentopportunities, publications, research, conferences, designations andnetworking in47 local chaptersglobally.

This infographichasbeenprepared solely for informationpurposes. Itdoesnotpurport tobe a completedescriptionof the survey results.The informationonwhich this report isbased hasbeenobtained from surveys conductedbyCoreNetGlobalduringH2 2016,butwehave not independently verified such information andwedonotguarantee that the information is accurateor complete. PublishedbyCushman&Wakefield,Research& InvestmentStrategy. ©2017Cushman&Wakefield, Inc.All rights reserved.

Among thebusiness sectors surveyed, theBanking,Financial Services, and Insurance (BFSI) sector is themost sensitive to real estate costs

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Virtual Reality the New Reality for Real Estate VR/ARCOULDBECOMEA$2.6BMARKET INREALESTATEBY 2025

Think Smart: How Law Firms Harness Technology to Survive

Historically, the legal sectorhas beenoneof the least aggressive adoptersof technology.But in aworldwhere clients are increasingly clamoring for lower costs,fixedprices and efficient service, smart lawfirms know they haveno choicebut toharness technology if theywant to thrive – and even survive – in today’s competitive landscape.

Asheadset technology conti ues to improve, anumber of companies are already exploring the possibilitiesofVR/AR for virtualproperty tours andprojections of scalemodels, and they see evengreater marketing opportunities down the road.

Thepromisesofvirtualandaugmented reality (VR/AR)havebeendescribed plentyof timesbefore:Fully immersivevideogames, sideline-qualityviews of sportingevents from thecomfortofa living room, surgeons reviewing apatient’smedical recordsand scansmid-procedurewithout leaving the operating tableandmanyotherflightsof fancy. Theproblemhasalwaysbeen the limitsof the technology.Processing speeds inheadsetshave traditionallybeen too slow tokeepupwith themovementsof humaneyesand limbs,and theheadsets’visualdisplayshave lacked thehigh definitionnecessary to resemble the realworld (forVR)or integrate seamlessly with real-worldvision (forAR), leavingusers frustrated. Thatcould soonchange.According toa research report released lastyearby GoldmanSachs,VR/ARhardwareand softwarearefinallybeginning tocatch upwithconsumerexpectationsandarepoised todisruptanumberofmarkets, including realestate. The report seesVR/ARbecominga$2.6billionmarket in realestateby2025 asheadsets suchas theOculusRiftand theMicrosoftHololens improveover thenext fewyears. It’sessential tobeginpreparing for theexpansion. In addition tovirtualwalkthroughsofbothfinishedandunfinishedbuildingsand virtualmodelsprojectedontodesksand tables in the realworld – innovations whicharealready inongoingdevelopment –companies seeopportunities for moregame-changingdevelopmentsa little fartherdown the road,oncemass adoption takeshold. FOURTHEDITION | 2017

edge the occupier

SHERRYCUSHMAN ExecutiveManagingDirector Leader,LegalSectorAdvisoryGroup sherry.cushman@cushwake.com

JAMESMEIKLE, MRICS Partner,CentralLondon OccupierRepresentation james.meikle@eur.cushwake.com JEREMYPEARSON ManagingDirector TenantAdvisoryGroup,AsiaPacific jeremy.pearson@cushwake.com

18TheOccupierEdge

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Insights andTrends fromCushman&Wakefield’s GlobalRealEstateExperts

60 | THE OCCUPIER NEWS Q2