Under multiple pressures such as geopolitical risks, macroeconomic uncertainty and artificial intelligence changes, the office model of global multinational companies is transforming, driving a new round of office space demand growth.
According to a report recently released by Knight Frank, real estate executives of global companies are still confident about the future of office space, and it is expected that the demand for corporate office space will increase instead of decrease, and they may seek more than 100 million square feet of office space in the next three to five years.
The report pointed out that as many as 63% of the corporate real estate executives surveyed said they were concerned about the current economic and geopolitical turmoil. However, companies did not stop expanding their office space, but took actions, including taking shorter leases, more flexible lease forms, and choosing office expansion locations that match risk diversification and talent access.
Fifty percent expect that the total office space will increase by 104 million square feet in the next three to five years. 27 companies expect their office space to expand by more than 20%, and the demand of these companies alone is as high as 49 million square feet.
The Knight Frank report interviewed nearly 300 real estate executives of companies to understand the latest trends in the industry. These executives are directly responsible for more than 650 million square feet of office space worldwide.
The report analyzed that companies are accelerating “decentralization”, shifting from the traditional single headquarters model to a flexible, multi-center regional network, selecting high-quality office space in cities with international influence and local talents.
Dr. Lee Elliott, head of global tenant research at Knight Frank, said: “Companies will no longer stick to traditional asset portfolios, but they have not abandoned office space, but have actively moved into better and more adaptable office environments. Especially in the face of business transformation and geopolitical turmoil, companies must adjust their office strategies in a timely manner if they want to succeed.”