Real estate provides a strategic opportunity, but C-Suite leaders want more

Leadership’s appreciation of real estate is growing, but there is significant potential for it to further support business strategy. This according to CBRE’s inaugural C-Suite Perspectives report, which canvassed the views of 252 C-Suite leaders across Europe and the US.

The research found that 94 per cent of respondents see real estate as important to achieving core business objectives, and half of leaders see real estate becoming more important over the next three years, with Chief Executive Officers and Chief Operating Officers (63 per cent) holding this view more strongly. At a sector level, 81 per cent of manufacturing firms anticipate real estate will grow in importance, indicating that they are poised to manage their real estate assets much more proactively than they have in the past.

The vast majority of respondents (94 per cent) believe that real estate plays a critical or very important role in shaping corporate culture and 72 per cent said real estate is having a positive impact on achieving core objectives.

Anna Esteban, Managing Director, Advisory & Transaction Services, Europe said: “Real estate is seen as a contributor to core business objectives, with leaders accepting its potential as a business value generator. It’s no surprise that companies with a higher exposure to offices attribute a greater importance to real estate, given how strongly the pandemic-related disruption impacted office portfolios and efforts to attract and retain the best talent We are also seeing manufacturing and related sectors such as transport are putting greater emphasis on their real estate as managing supply chain risk continues to be front of mind for leaders in these industries.”

CBRE’s research also revealed that leaders want their teams to have the best work environments. Elements that enable adaptability, resilience and continuity, such as increased lease flexibility, cost saving opportunities and better performance metrics, are top priorities.

To extract the most out of their real estate, CBRE says leaders have become closer to it, with direct reporting lines for corporate real estate teams becoming the norm. Almost all (97 per cent) respondents have a globally or regionally centralised real estate function with a reporting line into the C-Suite, of which 60 per cent is direct.

More than two thirds (68 per cent) of C-Suite leaders said direct reporting lines had been initiated since the pandemic, reflecting the increased alignment of real estate with supporting business transformation. There is a desire to optimise reporting structures further, with 77 per cent of those who currently have an indirect reporting line to the C-Suite intending to switch to direct reporting in the future.

Despite widespread reconfiguration of reporting lines in recent years, C-Suite leaders still desire more influence over real estate decisions. Seventy-six per cent of respondents said that they want more personal influence or involvement, as real estate becomes key in supporting businesses growth plans and enabling business resilience.

Tasos Vezyridis, Head of Thought Leadership, Europe commented: “Our research tells us that above all, leaders seek flexibility and want their real estate to be adaptable to the speed of business change. When viewed as an enabler instead of a cost, real estate can deliver places and spaces where teams and clients come together to generate ideas, innovate and achieve business growth.”

To read the full report click here.