CHINA. Corporate Real Estate Leading at the Speed of Change. China Corporate Real Estate Trends 2015

Transcription

1 0 CHINA Corporate Real Estate Leading at the Speed of Change China Corporate Real Estate Trends 2015

2 The third biennial JLL Global CRE Survey Americas 20% 544 total respondents 44% Asia Pacific 36 countries EMEA 36% 350+ companies represented Note: Region % is based on location of person responding 1

3 The China edition of CRE Survey 43 63% total respondents domestic corporates 37% MNCs 2

4 A broad range of industries represented BANKING AND FINANCIAL SERVICES 33% MANUFACTURING AND INDUSTRIAL 23% CONSUMER PRODUCTS 21% PROFESSIONAL SERVICES 9% TECHNOLOGY, MEDIA, AND TELECOMMUNICATIONS 39% RETAIL 14% ENERGY 7% REAL ESTATE 7% EDUCATION 7% OTHERS 15% Note: Does not add to 100%; respondents could select more than one sector. 3

5 Three key themes emerged from the survey 1 EVOLUTION China's CRE profession matures since 2012, keeping pace with global trends China s CRE teams are evolving into more strategic and business-driven roles, with growing levels of interaction with both the C-suite and procurement. 2 EXPECTATIONS CRE expectations and demands: Leapfrogging ahead Chinese CRE teams are seeing growing senior leadership engagement in their work - although more is needed - with demands increasing across a range of tactical and strategic tasks. 3 INTEGRATION Integration with other functions, business units offers an opportunity to strengthen CRE Both domestic and MNC CRE teams in China perceive a need for improvement in their internal relationships with other departments and with business leaders. Advancing from Good to Great Next steps: Forward thinking is the key to advancing China s CRE function. 4

6 THEME 1 EVOLUTION

7 The majority of CRE teams in China are experiencing a strengthening mandate Compared to 3 years ago, how would you assess the strength of the CRE team s mandate? Base: 491 (Global); 43 (China); 17 (MNC); 26 (Domestic) Note: Total may not add to 100% due to rounding. 6

8 Both MNCs and domestic CRE teams are becoming more centralized in terms of reporting lines To what level of the organization does the global head of CRE/CRE leader currently report? C-suite (i.e. CEO, CFO, CIO, COO) Managerial level (i.e. President, VP, Manager) Executive level (i.e. Officer, Executive, Supervisory level) Operational level (i.e. Administrator, clerk) 57% 82% 71% 90% 23% 11% 18% 5% 16% 8% 12% 5% 3% 0% 0% 0% 0% 20% 40% 60% 80% 100% Global All China MNC China Domestic Base: 453 (Global); 38 (All China); 17 (MNC); 21 (China Domestic) (only includes companies who have a global head of CRE) Note: Total may not add to 100% due to rounding. 7

9 More than one-third of CRE teams view outsourcing as strategic and focused on long-term value Please assess how strategic CRE outsourcing is to your firm. Outsourcing decisions are tactical and focused on short-term cost savings Outsourcing decisions are strategic and focused on long-term value Global 12% 16% 22% 24% 25% All China 21% 21% 18% 13% 26% China domestic 30% 30% 4% 17% 17% 0% 20% 40% 60% 80% 100% Base: 422 (Global); 38 (All China); 23 (China domestic) (only companies which outsource) Note: Total may not add to 100% due to rounding. 8

10 The biggest drivers for outsourcing in China are heavily strategic in nature What are the drivers for outsourcing CRE activities in your organization?. 100% 80% 60% 40% 88% 78% 71% 71% 65% 56% 58% 75% 46% 55% 38% 67% 20% 0% Refocusing in-house CRE resources on more strategic activities Productivity improvement Cost savings All China MNC China Domestic Lack of skills and knowledge in-house 17% 10% 0% Supporting an Initial Public Offering (IPO) Base: 40 (All China); 16 (MNC); 24 (China Domestic) Note: Total may not add to 100% due to rounding. 9

11 THEME 2 EXPECTATIONS 10

12 More strategic services and capabilities are increasingly demanded from leadership, particularly in domestic companies How are the demands of senior leadership/c-suite on the CRE team changing in terms of the following areas related to alignment of CRE with the firm s strategic priorities? Delivering a platform for growth in select markets Attracting and retaining talent Supporting cultural change Enhancing the productivity of the real estate portfolio Enhancing flexible (remote, mobile) working 48% 46% 53% 41% 56% 60% 47% 70% 59% 58% 59% 57% 75% 77% 76% 77% 62% 65% 82% 52% Driving the corporate sustainability /CSR agenda Bringing more flexibility to the leasehold portfolio Presenting scenarios and solutions to the business on demand Aligning CRE with business drivers and functional areas (HR, IT, Finance) 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% Global All China MNC China Domestic Base: 491 (Global); 43 (China); 17 (MNC); 26 (Domestic) 51% 67% 53% 77% 64% 74% 81% 70% 65% 75% 76% 74% 57% 59% 76% 45% Note: Total may not add to 100% due to rounding. 11

13 Expectations for productivity outcomes are higher than we see globally What are your company s expectations from CRE around the following productivity outcomes? % reporting high expectations 100% 80% 60% 67% 61% 82% 81% 78% 76% 60% 63% 76% 60% 76% 70% 40% 20% 0% Improve asset productivity Improve workplace productivity Improve business productivity Improve people productivity Global All China China Domestic Base: Improve asset productivity: 269 (global); 30 (China); 17 (Domestic) Improve workplace productivity: 274 (global); 31 (China); 18 (Domestic) Improve business productivity: 271 (global); 30 (China); 17 (Domestic) Improve people productivity: 275 (global); 30 (China); 17 (Domestic) Note: Total may not add to 100% due to rounding. 12

14 Over two-thirds Chinese CRE teams report a mature, transformative sustainability strategy How would you rate the maturity of your firm s sustainability strategy? Base: 491 (Global); 41 (China) Note: Total may not add to 100% due to rounding. 13

15 THEME 3 INTEGRATION

16 Integration across the business is viewed as the greatest weakness of Chinese CRE teams How does your CRE team perform relative to the following attributes? Base: 43 (China); 26 (China Domestic) Note: Total may not add to 100% due to rounding. 15

17 Similarly, lack of c-suite commitment, and integration are viewed as the biggest constraints to CRE in China In your opinion, what are the top three constraints that are hindering CRE from enhancing itself as a strategic value-add to your organization? Top ranked answer, % Base: 491 (Global); 43 (All China); 26 (China Domestic) Note: Total may not add to 100% due to rounding. 16

18 One-fifth of respondents in China report being ill-equipped to meet demands from leadership How well-equipped do you feel to meet the changing demands? Base: 476 (Global); 41 (All China); 25 (China Domestic) Note: Total may not add to 100% due to rounding. 17

19 Advancing from good to great

20 To advance from good to great, China s CRE teams should focus in a few key areas 1 Obtaining greater senior Improving data and management backing. analytics capabilities. Improving their general business skills and building stronger relationships with internal leaders are critical goals that can help overcome the lack of sustained C-suite commitment seen as a top constraint by China s CRE teams. 2 3 Continue making the case for using outsourced service providers to supplement inhouse capabilities. With enhanced data and analytics capabilities, China s CRE teams undoubtedly will be better positioned to demonstrate forward thinking, and could use predictive analytics to present persuasive, fact based innovations to senior leadership. Overcoming lack of trust and perceived value of outsourced services will require new processes for assessing providers, as well as requiring CRE service providers to adjust their offerings and capabilities to match the needs and preferences of this growing market. 19

21 Additional tactical steps to strengthen CRE in China Hiring and training CRE staff with strategic thinking and business skills that encompass knowledge of finance and other business areas; Hiring and training for the ability to assess and manage external vendors, and to help vendors become more effective at operating within China s unique business environment; Prioritizing people and people skills, to further engagement with business unit leaders; Creating a strong data and analytics platform to bring science to long-term strategy and everyday delivery, and to present data-driven, innovative ideas to senior leadership; Defining success and benchmarking progress and position relative to peers Leveraging vendors not only for tactical execution, but also to extend strategic capabilities such as data and analytics and to gain access to global best practices in CRE. 20

22 THANK YOU