Around the world, workspace requirements are changing dramatically. Fuelled by an increasingly tech-driven business ecosystem, office spaces have to evolve in order to meet new workplace demands.

According to Jonathan Turner, Managing Director, Advisory & Transaction Services Africa at CBRE Excellerate, this evolution is having a profound impact on occupiers and landlords - who have to adjust their portfolio strategies in a myriad of ways.

“Traditionally, portfolio strategies for occupiers have been purely cost-driven,” says Turner. “Yet in highly developed markets such as those in the United States and Europe, this is no longer the case. Increasingly, occupier portfolio strategies are becoming more aligned to corporate objectives and corporate culture. This closer alignment is being driven principally by a focus on how to attract and retain the best staff and how to optimise their productivity. Fundamental to this is providing the right workspace for employees. It also requires greater inherent flexibility within a property portfolio structure. In South Africa, however, many occupiers and landlords remain tied to a cost-driven portfolio strategy, which is arguably inhibiting their future growth and sustainability.”

War for Talent Shaping Spaces

As the digital era and Fourth Industrial Revolution trigger the need for new skills and expertise, companies worldwide are finding it difficult to attract and retain the right talent. Dubbed the global ‘war for talent’, this challenge is pushing companies to create workspaces and environments that attract talented professionals. Moreover, there is a recognition that workspaces have to be highly conducive to productivity, while also supporting trends such as increased collaboration, health and wellbeing, and remote working.

“In response to these demands, many global occupiers and landlords are embracing new workspace models and strategies,” notes Angus Alexander, Commercial Property Leasing & Sales Consultant, “For example, many are creating ‘activity-based’ work settings: collaborative spaces; quiet rooms; open plan work areas; breakout spaces, chill areas; etc.. Within every workspace, technology now plays a dominant role and is critical to achieving a seamless and efficient end user experience.”

Promoting Agility

As a result, this requires a much more agile approach to leases and portfolios to meet the demand for more flexible and fluid workspaces. In most cases the core facilities will remain within conventional leases, while certain parts of the portfolio will embrace more flexible terms to move with the ebb and flow of the business, along with initiatives to stimulate innovation and development, such as incubator hubs. Essentially, savvy occupiers and landlords in developed markets understand the need to align corporate objectives (chief among them being around talent and product development) and corporate culture with their real estate objectives. While achieving this alignment is no easy task, it is proving to be imperative in a rapidly evolving business and workplace landscape.

Existing portfolio strategies in South Africa are still primarily dominated by conventional lease structures and owner-occupation, underpinned by a cost-driven focus and associated densification of space utilisation. With skyrocketing unemployment and an embattled local economy, South African occupiers and landlords have a host of challenges to tackle in order to establish a greater alignment between the changing needs of the business, alongside their lease commitments and the physical workplace, including closer reflection of global workplace trends.

Leadership is Key

“Arguably, local occupiers must first and foremost embrace the shift to more flexible portfolios that cater for agile and fluid business requirements,” says Turner. “This needs to be carried through into the use of space and the associated user experience for staff. This shift in approach needs to come from the top, with senior management leading the change. Admittedly, this will be difficult for occupiers who are still tied into longer leases or who sit with physical assets not suited to modern requirements.”

Once there is buy-in from the top level, occupiers need to examine existing physical spaces and ensure that they are conducive to working environments in which the end user is empowered. In South Africa, employee engagement is a massive challenge, which ultimately results in poor productivity.

“For managers and workspace designers, the challenge is therefore to create environments that encourage engagement, collaboration, provide motivation and are also geared towards high productivity and output,” adds Alexander “Naturally, much of this will be technology driven and will require investment into the end user experience.”

In many cases, local occupiers will need to rethink their ‘traditional’ procurement of space. This will involve a shift to hybrid models that incorporate both conventional leases as well as flexible agreements, facilitating more dynamic adaptation conducive to continually developing businesses needs and the demands of a technology-enabled and focused workforce.

“As the global war for talent intensifies and the business environment accelerates its shift to fluid, digitally-driven modes of work, occupiers who fail to evolve their workplace environment and associated property procurement strategy will quickly find themselves with outdated and constraining property portfolios,” concludes Turner.


Issued on behalf of CBRE Excellerate.
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