China’s ongoing transition to a more service-driven economy is driving the emergence of new real estate trends. Nowhere has this been more apparent than in the office sector, where economic restructuring and the government’s promotion of entrepreneurship and innovation have resulted in a surge in leasing demand from domestic corporates. CBRE Research data show that in 2015 and 2016, domestic occupiers accounted for more than 80% of new office demand in 17 major cities.
In order to better understand the growth in office demand from domestic companies, and explain how Chinese companies can devise effective corporate real estate (CRE) strategies, in Q4 2016 CBRE Research conducted its first ever survey of domestic office occupiers. Key findings include:
- Economic uncertainty and cost escalation are regarded as the two main challenges in the coming years
- Most (57%) respondents plan to increase headcount over the next three years, resulting in new office demand.
- A large proportion (30%) of respondents plan to expand in the next three years. Taking new set-ups and expansion into consideration, Beijing will be the most active market.
- Respondents identified “more efficient space utilisation” as the key CRE strategy for realising business objectives. “Upgrading building quality” is also high on their agenda.
- Cost, transportation and building design are the top three factors respondents consider when selecting an office. When deciding on whether to open an office in a new city, government incentives are the key factor, together with cost and infrastructure.
- A large proportion (23%) of respondents said they have adopted or plan to adopt workplace strategy.