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It’s back to work in 2021: CBRE
Henry Chin, Head of Research at CBRE APAC
Bosses are increasingly keen for their staff to return to the office, but many offices will need to go through some remodelling as workers look to more collaborative workspaces, says Henry Chin, head of research at CBRE APAC.
Whilst the trend is that companies are now adapting to having more flexible working options post-COVID, CBRE APAC’s conversations with occupiers have shown that a clear majority would like their workforce back in the office.
“We do believe, after talking with Asia Pacific occupiers, that 70% of senior managers in APAC prefer people to be back in the office. As a result, companies will need to rethink their workplace design, and how they plan their workforces,” he said.
When it comes to designing the workplace, Chin said that a more collaborative layout will be more in demand. Referring to solo cubicles as “me” spaces, he said that this old design will have to shift to “we” or shared space.
“In the old days, we all had quite a lot of space for individual cubicles or concentration areas. Going forward, the future of the office is for people to meet, collaborate, brainstorm, and meet your clients,” he said.
“Previously, 50% of our offices were ‘me’ spaces- in other words, cubicles. We are going to see less of ‘me’, and more of ‘we’, so this is something that will cause a huge transformation for the future of office design,” he added.
Lock in now
“If we look at the markets across Asia Pacific, 2021 is still going to be a tenant favored market,” he said.
CBRE APAC said that they advise their tenants to take advantage of the current market condition to expand or make plans before rentals begin to have an uptake and as the market recovers.
“The good news in Asia Pacific is that we are leading global growth and we are better in terms of recovery according to economic projections for 2021,” he said.
“We advise tenants to take advantage of the current market condition to renew, to expand, or to consolidate as 2021 will be a good year. I think that it’s going to outperform because of domestic consumption and recovery in global trade,” he added.
Rebound is expected for Sydney, Melbourne, and Shanghai by 2022, whilst Singapore is already seeing rental contractions this year.
“We expect to see the rebound from 2022 onwards particularly for markets in Sydney, Melbourne, and Shanghai. Unfortunately, if you are in Singapore, you are probably already missing the boat because we will see huge rental contractions by this year and we will also see the swing back. So, the rent is going to continue to grow,” he said.
“Based on our latest leasing sentiment survey, we have seen a wider recovery in terms of leasing sentiment in all the major markets, with an increase in leasing inquiries and office site visits. Office-based industries remain relatively healthy in terms of financial status. However, we are expecting to see a wider recovery in the first half of this year. Most occupiers will probably be looking at expansion plans for the second half of 2021,” he said.
Revenge consumption
For hotels and other properties fueled by tourism, he said that improvement may be seen through promoting staycations. Whilst tourism continues to be at a standstill, the short-term outlook will remain the same. He also noted that outbound investments for Asia are recovering and investors were observed to prefer investing in the Asia Pacific region. “When we talk about the tourism sector, we have to realize that travel restrictions and social distancing measures will continue to weigh down the short-term outlook. But we are seeing revenge staycations in some major markets in the region, so I’m not so bearish,” he said. “We are starting to see a recovery for Asian outbound investments in the next 12 months. Most Asian investors tell us they want to deploy more capital in the Asia Pacific region,” he added. As for retail, revenues are projected to be recovered by the second half of the year. The shift to e-commerce is reviving the industry but in the same way it must be ensured that the shopping experience is kept intact. “We do believe retail, particularly in Asia Pacific, is also here to stay because most Asians love shopping. The shift to e-commerce is fundamentally changing shopping behaviors. As a result, when we talk to retailers, they tell us they are going to redefine their online offerings,” he said. “In the study we conducted towards the
