Business Trends

Will New Real Estate Strategies Improve Productivity in Asia? by Economist Corporate Network

File Type: Free Content, Article
Release Date: February 2014
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The Economist Corporate Network’s 2014 Asia Business Outlook Survey, “Rethinking Profitable Growth,” offers a peek into the minds of the region’s business leaders. Survey respondents – 334 senior executives with Asian and other multinational companies who are based throughout the Asia Pacific region – indicated that “many companies are looking to real estate strategy as a way to improve their management of human capital and productivity.”

Among the report’s key findings for commercial real estate:

  • Labor costs are rising faster than productivity, particularly in China and India, while supply/demand imbalances are resulting in higher wages and staff turnover, all of which make managing human capital more challenging.
  • Changing real estate policies can help companies tackle these issues, by increasing workplace density and implementing flexible work environments that reduce real estate costs per worker and thus boost productivity.
  • Upgrading work environments and making them more conducive to collaboration and creativity may help companies reduce staff turnover rates and grow revenues.
  • One-half to two-thirds of respondents’ companies recently implemented real estate policies designed to improve productivity, or plan to do so soon. These policies include investing in workplaces to improve employee attraction and retention, increasing workplace density and using flexible or alternative workplace strategies such as hot-desking (multiple office workers using the same desk or workstation at different times).