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SINGAPORE-The “mega trend” for Asia Pacific commercial real estate executives is reducing real estate costs, according to Jones Lang LaSalle’s inaugural Corporate Real Estate Impact Survey, which queried 50 executives with control over some 70 million sf of office space.

“While this appears to be stating the obvious, the scope for savings runs far beyond the simple reduction of rental costs,” says Phil Simpson, international director of corporate solutions at JLL. “Many corporations have been focusing their time and resources on short-term measures to avoid capital expense and accumulate objective savings and this immediately restricts their ability to address more fundamental approaches that bring in longer-terms rewards. There are other more significant measures that corporations can explore to reduce their real estate costs in the long run such as restructuring and rationalizing portfolios, improving procurement processes and contract management, and re-engineering the property administration process.”

Data for this issue of the CREIS has been obtained from over 50 corporate real estate executives drawn from a wide spectrum of industries. Approximately 42% of respondents were in the financial sector, 38% from the IT and Oil & Petroleum sectors and the remaining 20% from Communications and Business Services sectors. The respondents employ a total of more than 240,000 staff in the Asia Pacific region and occupy approximately 6.5 million square meters of office accommodation. Other key CRE issues and mega trends highlighted in the survey results include:

–CRE is increasingly being recognized as a specialist discipline, with most occupiers seeking to implement CRE strategies at a regional or sub-regional level;

–Outsourcing of CRE activities to external service providers has been gaining acceptance and momentum within the Asia Pacific. The dominant direction has been for firms to increase the range of CRE functions being outsourced to third party providers.

–Widespread “off shoring” of business functions and processes among service providers, particularly financial service firms, is a recent trend with tremendous potential for growth in the region;

–China and India will be the two major growth markets over the next few years despite different demand drivers. Demand in China driven by manufacturing facilities or activities servicing the local market, while in India demand is primarily for back office facilities to service overseas markets.

JLL hopes its new product will provide an ongoing source of comparable data and trend analysis to better understand factors that will drive future CRE strategy in Asia Pacific. The company says future issues of the CREIS will continue to address owners/occupiers sentiments that impact the CRE market.

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