Multinationals retain a solid overall appetite for expansion in Asia Pacific but activity is expected to vary across different markets, according to a survey by US real estate group CBRE.
The group recently published its 2017 Asia Pacific Occupier Survey incorporating the findings of a regional survey of multinational occupiers along with four separate national surveys of domestic occupiers in China, India, Japan and Australia.
A total of 450 responses were received, with the resulting report focuses on the responses received from senior executives at 50 multinational corporations (MNCs).
The survey found that intentions to expand were strongest in emerging markets for new businesses. China and India were the markets in which MNCs had the strongest intentions to expand. Among developed markets, Japan recorded the strongest intentions to expand, driven by solid demand from the IT and pharmaceutical sectors.
MNCs’ intentions to consolidate were strongest in mature markets such as Hong Kong, South Korea and Taiwan. However, Hong Kong continues to benefit from overseas expansion by Chinese enterprises leasing space in Grade A buildings.
“This clear divergence highlights multinationals’ strategy of capturing the growth potential of emerging markets while minimising costs by streamlining operations in more established markets,” the report notes.
Around half of MNCs surveyed said they intend to increase their headcount, a moderate uptick on last year. New headcount growth is expected to continue to be driven by organic business growth (61%), reaffirming multinationals’ confidence in Asia Pacific’s long-term growth potential in spite of rising global economic uncertainty.
Among Asia Pacific-based companies, more than 80% of Indian respondents plan to increase their headcount in the next three years, reflecting the country’s buoyant economy, steady progress in enacting regulatory reforms and booming outsourcing and information technology enabled services (ITeS) sector.
The latest survey also finds that global economic uncertainty and the overriding focus on cost saving is prompting multinationals to adopt a more proactive approach towards implementing workplace strategy.
MNCs in Asia are moving ahead with implementing flexible working, by requiring employees to share desks. By 2020, 66% of respondents will have raised the sharing ratio beyond 1:1, up from the current 30%, meaning that the number of desks will be lower than the total number of employees.
Mobile working is being facilitated by the advent of technology such as remote access to corporate systems and laptop computers. Half of MNCs participating in the survey have already implemented mobile working and another 42% plan to implement the practice, suggesting nearly all will allow mobile working in the near future.
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