Flexible workspace and tech enablement strategies to help cut real estate costs for financial and large-scale occupiers in Asia

Flexible workspace an ideal strategy for enterprises likely to fluctuate in size

Hong Kong, 11 September 2019 – Colliers International (NASDAQ: CIGI; TSX: CIGI), a global leader in commercial real estate services, today released a new research report entitled Flex & Tech: Key Methods to Reduce Real Estate Costs for Financial and Large Scale Occupiers. The report examines how flexible workspace, further decentralization, tech enablement and building ownership can help financial and large occupiers save real estate costs in the long term.

Andrew Haskins, Executive Director of Research, Asia, at Colliers commented: “Finance, still the largest tenant sector in Asian CBDs, faces pressures including persistent low interest rates, technological change, and a high regulatory burden. Real estate costs are significant for most financial and large-scale occupier businesses. Incorporating flexible workspace, considering a decentralised location strategy and adopting clouded, tech-enabled work processes will reduce real estate cost and improve profitability.”

Flexible Workspace

Sam Harvey-Jones, Managing Director of Occupier Services, Asia added: “Given the volatility of future headcount needs, not least in the financial sector, the use of flexible workspace makes good sense in enterprise real estate strategy. Flexible workspace now accounts for between 2-5% of total Grade A office space in Asia’s four key financial centres of Hong Kong, Tokyo, Singapore and Shanghai, with secure and scalable corporate-level specifications.”

“Clouded working is also enabling large enterprises to work more efficiently, and with more security, in decentralised models – driving the viability of flexible workspace to accommodate likely fluctuations and decrease real estate cost across organisations.”

Decentralization
Decentralization of back office or middle office operations has been a trend in the financial services sector in Hong Kong for several years. Further decentralization is an appropriate strategy for larger occupiers, especially in Hong Kong and Tokyo, where the gaps in rents are widest in Asia between the CBD and outer areas. We also see decentralization as a viable option for occupiers in Shanghai and Singapore.

Tech-driven Measures
Embracing new technology will also save costs. In the near term, adoption of cloud-based working models will reduce the space and resources that financial and other large occupiers need to run tech infrastructure. Over five years, fuelled by shifts to online services and further automation, we believe large Asian banks with a consumer focus have the potential to cut branch and staff totals by 20-35%.

Building Ownership vs Leasing
Owning buildings rather than leasing them now appears attractive. Persistently low interest rates make this option cheaper for all companies, while regulatory issues such as resolution planning encourage ownership in the finance sector. An ideal split between owned and leased buildings is hard to specify, although for certain large financial occupiers owned buildings appear to be trending towards 30% of occupied space.

Click here to download Flex & Tech.

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For further information, please contact:

Michelle Shao
Asia Marketing Communications 
Colliers International 
Phone: (852) 2822 0541
Email: michelle.shao@colliers.com

About Colliers International

Colliers International (NASDAQ, TSX: CIGI) is a leading global real estate services and investment management company. With operations in 68 countries, our 14,000 enterprising people work collaboratively to provide expert advice and services to maximize the value of property for real estate occupiers, owners and investors. For more than 20 years, our experienced leadership team, owning approximately 40% of our equity, have delivered industry-leading investment returns for shareholders. In 2018, corporate revenues were $2.8 billion ($3.3 billion including affiliates), with more than $26 billion of assets under management. To learn more about how we accelerate success, visit our website or follow us on