Cost escalations, economic uncertainty and efficient use of space are global real estate challenges facing corporate occupiers and their business operations.
Across Sub-Saharan Africa, active management of cost escalations for occupiers remains a major challenge.
Within a context of economic uncertainty, global corporates are seeking initiatives to enhance space efficiencies, which when implemented can have a significant impact on costs.
“Globally, occupier services have evolved since 2010 following the wake of the global recession when an estimated 92% of global companies surveyed by CBRE cited cost management as their main concern. Fast forward to 2016 and the focus is now balanced across performance, people and space,” says
In many parts of the continent, corporate real estate as a professional service is still a fairly new concept, so there is significant opportunity to re position property as an important strategic resource with a range of solutions to reduce cost, improve business output and increase competitive advantage, explains Cleland.
Corporate occupiers seek better real estate data to drive performance in their businesses and are looking to drive workplace collaboration through real estate strategies enabling them to focus on their business operations. In addition, labour, skills and employee preferences are a key challenge that can be impacted by real estate.
Furthermore, to protect critical business continuity, property solutions must incorporate provisions for basic services where infrastructure can be unreliable.
Cleland points out that occupiers expect that a property should facilitate flexibility, productivity and efficiency, with a definite move away from the traditional closed office to a modern, collaborative open plan layout.
“An ideal site location enables these businesses to position themselves in the hub of future business activity, which is critical for customer and staff retention and growth. The location must be brand promoting and proximity to competitors is important.”
In West Africa, many larger corporates are starting to implement new country office headquarters strategies, either by developing land they own and or in collaboration with property funds or development partners. In some cases, corporate real estate professionals are being engaged to assist in defining requirements, identifying and assessing options and developing strategic real estate solution.
Cleland says with the economic downturn in Nigeria for example, corporates are beginning to assess their overall cost base of which real estate makes up one of the largest components.
“They are increasingly turning to real estate professionals to identify and execute opportunities around rents, renewals, building operating costs and the disposal of excess space and sites,” she says.