Teh Young Khean, executive director of office strategy and solutions at Knight Frank Malaysia, said that the implementation of a post-pandemic workplace strategy that seamlessly satisfies the expanding needs of the country's corporate landscape is a formidable challenge for Malaysian employers.
"Corporate real estate portfolios will display a mix of core and flex space, the relocation of core facilities to avert obsolescence, and a greater alignment with ESG ambitions," he said.
A survey by Knight Frank | Cresa reveals the real difficulties companies encounter when trying to execute a post-pandemic workplace plan that complies with an ever-growing set of corporate demands.
Up to 60 per cent of respondents believe that over the next three years, the complexity of managing their workplace strategy will either increase or increase significantly.
Most global corporations, or 56 per cent, plan to move towards a 'hybrid' workstyle, offering employees a mix of home and office working, but almost a third, or 31 per cent are implementing an 'office first' or 'office only' approach.
Just 12 per cent of firms plan to implement a 'work from anywhere', 'remote first' or 'fully flexible' workstyle.
Knight Frank | Cresa is a partnership between Knight Frank and Cresa, the largest occupier-centric commercial real estate firm in the world.
The research, titled Knight Frank | Cresa's (Y)OURSPACE, is released every two years and details the goals and difficulties faced by top executives in charge of making real estate decisions at over 350 companies with a combined workforce of over 10 million.
According to Tim Armstrong, global head of occupier strategy and solutions at Knight Frank, the majority of occupiers will find that their current office buildings cannot accommodate their needs for an office-centric approach in a more flexible environment.
"A rise in both the functional and physical obsolescence of buildings will drive occupiers to higher quality, more sustainable, and amenity-rich space, but the supply of this space is coming under increasing pressure in global markets," he said.
The report showed that many occupiers would look for new office buildings as a result of the necessity for businesses to achieve their strategic goals, transform for the post-pandemic period, and deal with the mounting difficulties of both functional and physical obsolescence.
It revealed that 55 per cent of businesses expect to increase or greatly increase their total office portfolio over the next three years, with the growth being primarily driven by businesses with up to 10,000 employees. It also revealed that 47 per cent of global businesses expect to replace their corporate headquarters (HQ) in the next three years, up from 40 per cent in 2021.
In contrast, around 50 per cent of the very largest firms surveyed, those with over 50,000 employees, anticipate some reduction in space in their global portfolio.
"As firms look forward, real estate is now clearly seen as a strategic device for implementing corporate objectives, and not just a cost to be managed, with 94 per cent of respondents regarding real estate as entirely or partially aligned with the broader strategy of the business.
"This strategic alignment will be important as pressure to transform business models increases...86 per cent of firms anticipate at least one form of business transformation, and the most popular transformation route being the entry into new geographical markets, according to 45 per cent of all respondents," the report said.
Dr. Lee Elliott, global head of occupier research at Knight Frank, said that since businesses are operating in a post-pandemic environment, corporate decision-makers are 'removing the blinkers' and making informed choices about their future corporate real estate strategy based on a wider range of business issues than just the pandemic.
"The vast majority are opting for a hybrid or 'office first' approach, bringing them much closer to how many corporates were viewing their future needs before the pandemic, with just 12 per cent of firms now pursuing a 'remote first' or 'fully flexible' model. Firms are looking to work their offices harder, but still offer some flexibility to staff," he said.
