from DTZ’s Global Real Estate Expertssites.cassidyturley.com/GlobalOccupierServices/The... · from DTZ’s Global Real Estate Experts Insights and Trends The Coworking Revolution

ISSUE 1

from DTZ’s Global Real Estate ExpertsInsights and Trends

The Coworking RevolutionTop 10 Workplace InnovationsRisk Reduction Strategies

Seven Trends Shaping the Future of the Financial WorkplaceAccelerated Emergence of Alternate Office Hubs in AsiaOccupancy Costs at-a-Glance

In this issue

Our recent merger with Cassidy Turley is an inflection point for DTZ. By merging with this powerhouse, we now employ more than 28,000 talented team members in 265 offices located in more than 50 countries. DTZ has new faces, new capabilities, new opportunities and, most importantly, our new global reach. DTZ is now truly worldwide. Combining DTZ’s full-service capabilities throughout Europe and Asia with Cassidy Turley’s strong market leadership in the U.S. immediately positions DTZ as a top-three commercial real estate firm, with the ability to address any corporate real estate needs that come our way. Our Global Occupier Services (GOS) group includes the full suite of Corporate Services and Strategic Consulting, as well as our Tenant Representatives so that we can consistently provide the best possible service to our clients.

With all these changes, it only seemed fitting to come up with a new name for our global occupier magazine, The Occupier Edge, which showcases insights and analyses from DTZ thought leaders across Global Occupier Services .After all, the synergy of these combined teams is sure to give us an even bigger edge over our competition as we forge ahead.

The Occupier Edge offers insights and trends from our global real estate experts. Top workplace innovations, the co-working evolution, alternative office hubs in Asia, the big business globalization dilemma, and the future of the financial workplace will all be explored in this edition.

We may be growing in size and scale, but one thing that will never change is our continued focus on our clients. The passion to serve clients and enable their business objectives will always remain at the center of all we do.

Steven QuickChief Executive Global Occupier Services

The Coworking Revolution

Top 10 Workplace Innovations

Risk Reduction Strategies

Future of the Financial Workplace

Seven Trends Shaping the Future of the Financial Workplace

Accelerated Emergence of Alternate Office Hubs in Asia

Occupancy Costs at-a-Glance

In this issue

Simply put, coworking consists of two or more people working in the same office space, but not for the same company or on the same project. The concept is different from that of executive suites, where users have private offices but share support services, and it’s different from working alongside strangers in an Internet café. Coworking is a membership-based system designed for workers who share a core set of values—community, openness, collaboration and accessibility—and want the flexibility to work where, when and how they can be most productive.

The concept was initially developed to provide a solution for the problem of workspace for small businesses unable or unwilling to commit to traditional lease terms. Early adopters found that they not only benefited from flexibility and economy, but also gained social and collaborative opportunities.

In recent years, coworking has made the transition from a niche market to a fully fledged alternative to the traditional office, thanks to technology; the growth of online, tech and creative industries; generational change; and an increase in micro businesses and independent workers. Today, even large companies join coworking programs to manage excess capacity in traditional office space and to enable their employees to work more conveniently.

A 2014 Deskmag survey of 2,700 coworking space owners and managers showed that 90% of operators worldwide expect increased demand in 2015. The concept is spreading rapidly across Europe and the U.S. It is influencing working environments across companies of all sizes, as competition for

skills increases and large corporations seek to attract and retain young talent.

Millennials—workers 35 and younger, who are overtaking Baby Boomers as the largest cohort in the U.S. labor force—tend to prefer working in a highly connected environment close to services and entertainment. Studies have shown that three-quarters of Millennials want flexible working schedules, and nearly nine in 10 say they favor the kind of collaborative culture offered by flexible working environments.

Given coworking’s origins among start-up businesses and its appeal to young professionals, it’s not surprising that these centers are often located in urban live-work-play neighborhoods popular with creative, technology and digital sector workers. As larger companies increasingly look for satellite offices in these neighborhoods to attract young talent, coworking membership is emerging as an important component of attraction and retention efforts. Moreover, a location that works for coworking today might be a good place to consider a traditional office lease in the future.

Coworking also offers a narrower pricing gap between submarkets than conventional offices, so as more centers open up in downtown areas, it may be economical for large companies to become members in order to provide an alternative space for employees. Some companies have even embedded employees in coworking spaces for the collaborative business opportunities. For example, employees of a graphic services company and a public relations agency might win business from each other via the social aspect of coworking, or they may join forces to win business from

The Coworking Revolution

DTZ’s The Occupier Edge | 1

A decade ago, the coworking concept did not exist. Today, hundreds of coworking hubs across the country are up and running, and the trend is accelerating at an incredible pace. Coworking spaces increased more than 400 % between 2010 and 2012, and providers of coworking offices see demand continuing to increase. Corporate real estate professionals take heed: The coworking revolution has begun.

1. Concentration: Recognizing that workers need to concentrate as well as collaborate, workplace strategists are including small rooms and larger quiet zones in the work environment.

2. Outdoor Amenities: If it’s not possible to offer opportunities to work outdoors, companies are adding green walls and taking advantage of sunlight and views to help bring the outdoors in.

3. On-Demand Space: Companies are able to offer work spaces and amenities when and where they’re needed by tapping into coworking and shared-space options available through third parties.

4. Transparency: Glass walls and perforated materials improve visual access to natural light and allow casual sharing of in-progress work which enhances employee engagement.

5. Talent: Workplace amenities and branding the look and feel of the workplace can help attract a specific employee base in line with a company’s demographic and diversity goals.

6. Wellness: Organizations are providing workplaces that encourage people to be active, access fresh air and eat well to promote employee health and productivity.

7. Social Media: New communication modes support virtual team interactions, help employees maintain visibility, and offer ways for the organization to deliver positive messages that support desirable behaviors.

8. Cloud Computing: Software applications on the cloud support mobility and address licensing and cost issues associated with using multiple devices to access files and collaborate virtually.

9. Hierarchy-Free: With less ownership of individual spaces, territoriality is diminishing and traditional hierarchies are becoming less obvious, which encourages creativity and innovation in the workforce.

10. Next-Gen Ergonomics: Beyond traditional ergonomic features such as adjustable height monitors and gas-lift seating, today’s workplace includes sit-stand desks and lightweight mobile elements.

a third party. To encourage such collaboration, coworking spaces dedicate 10 to 20% of their floor space, on average, to areas where users can socialize and interact.

As an organization representing occupiers, DTZ is seeing this trend prompt changes to traditional working styles in larger corporations. This will impact the type and location of buildings required in the future and is starting to affect overall office occupancy strategies. Bank of America, Merrill Lynch, Macquarie Group, and Deutsche Bank are just a few examples of companies that are adopting smarter, more agile working practices and introducing activity-based workplace design.

As traditional working styles of larger corporate organizations change to meet the evolving requirements of today’s workforce, there will be an impact on location and workplace design. Coworking is at the forefront of these trends, offering flexibility, economy, collaboration, and the opportunity to attract talent. Although it’s still a relatively new concept, coworking is revolutionizing the way corporate office strategy is conducted.

Top 10 Workplace Innovations


Model global occupancy costs, taking into account workplace strategy for a single location or your entire global portfolio.

occupiermetrics.dtz.com

In 2012, the FCPA Resource Guide detailed acceptable and unacceptable expenses. For example, buying an airline ticket so a government official can inspect a facility is acceptable, but buying tickets for the official and a spouse to visit a popular vacation spot is not. The Resource Guide also underscored that companies may be liable for the actions of third-party agents and suppliers acting on their behalf, even if the client organization is unaware of the wrong-doing. Hiring agents and consultants is no longer a means of avoiding or distancing from the potential liability.

Companies also face liability under the USA PATRIOT Act. Designed to combat money laundering for terrorist activity, the PATRIOT Act governs the movement of money to and from interbank accounts between U.S. and foreign entities, including capital for real estate-related transactions.

Enforcement of FCPA started to ramp up after the 9/11 attacks, as the USA PATRIOT Act strengthened federal authority to “follow the money” as a means to cut off funding to terrorist groups. After the global economic crash of 2008, additional resources were poured into the DOJ and the U.S. Securities and Exchange Commission (SEC) to clamp down on lawbreakers. Enforcement peaked in 2010 with 78 new enforcement actions by DOJ and SEC. Since then, the DOJ has served 25 to 50 new indictments, underscoring its commitment to enforcing FCPA regulations permanently. Since 2008, more than $5 billion in fines have been imposed against corporations and individuals, and hundreds of executives have been charged with wrongdoing. Fines as high as $800 million have been imposed, but even these big numbers can pale in comparison to the cost of returning ill-gotten profits. And the emotional cost of prison sentences, along with the damage to a company’s public image, can’t be measured in dollars.

Over the past several years, the DOJ has conducted industry “sweeps” targeting specific business sectors. The real estate sector is regarded as a high-profile industry by both the SEC and DOJ, but so far has not been subject to an industry sweep. Most real estate-related investigations have been initiated voluntarily from corporate internal audits. There is concern that the DOJ and SEC may move into the real estate space as a potential industry sweep.

Understanding the Law

CRE leaders are challenged to meet global expansion expectations as business customs in many countries can pose direct criminal risk to CRE executives.The problem is not new, but the stakes are higher than ever: In conducting business overseas, corporate real estate (CRE) professionals must adhere to U.S. anti-corruption and counter-terrorism laws. It may seem painfully obvious that people shouldn’t bribe foreign officials or help them with money laundering. However, companies are frequently hit with hefty fines, and executives are fired or even jailed for trying to cut corners in foreign transactions.

In recent years, the Department of Justice (DOJ) has stepped up enforcement of the Foreign Corrupt Practices Act (FCPA) and related laws designed to prevent U.S. companies from paying bribes to gain an advantage in doing business internationally. The pattern of enforcement makes it clear that

authorities are focusing on industry sectors with the greatest opportunities and worst reputations for illegal behavior. No matter which industry is targeted, corporate real estate is likely to be in the line of fire. But it’s only a matter of time before the real estate services industry itself sees a wave of enforcement actions, which could splash back onto corporate clients.

As companies pursue global expansion strategies, CRE departments can be caught between a rock and a hard place: the need to establish facilities on schedule versus the deep culture of public sector corruption that exists in many countries. This tension is a very real dilemma, but CRE departments can avoid problems by following a program of awareness, internal controls and vigilant oversight.

Enacted in 1977, FCPA makes it illegal for U.S. companies and their agents to provide financial benefits to foreign government officials in order to gain influence or advantage in business. An amendment in 1998 clarified that anti-bribery provisions of the law apply to foreign firms and agents seeking a shortcut in their U.S. operations. Moreover, publicly traded companies must keep complete and accurate accounting records of foreign transactions and operations.

Real Estate Services-Related Violations

A rating system published by FCPAblog.com shows real estate as lower than most industry sectors, suggesting that fewer observations by the FBI and other agencies result in investigations. Nevertheless, many violations related to large real estate service companies have been uncovered, often as a result of internal investigations that companies have self-reported to authorities.

Risk Reduction Strategies:Navigating Global Expansion in Corruption-Prone Countries


Even in corruption-prone countries, real estate transactions routinely get completed without resorting to bribes. This can require patience and persistence, and at times it may be beneficial to involve U.S. government agencies to help companies develop cross-border policies.

Brokers and project managers must also be aware of restrictions on gifts and other inducements that may have monetary value. It may be customary to give token gifts or provide lavish entertainment to foreign officials, so it’s vital that CRE professionals know the limits of the law in this regard. One rule of thumb involves disclosure: If a night of entertainment, fee or commission might raise a red flag on an expense report or accounting statement, that’s a clear indication that it should be avoided.

In choosing third-party brokers, facility managers or project managers to aid in global expansion, CRE leaders must ensure that these organizations have stringent compliance policies in place and that they train new employees and reinforce training periodically to maintain awareness of, and adherence to, these laws.

It may be wise to select service providers who demonstrate a strong track record of above-board transactions and operations in a specific country. But even the best track record can be blemished if a service provider lacks a rigorous policy and a set of internal controls to identify bad actors. The client company’s system of internal controls acts as a further backstop to ensure that any wrongdoing is noticed and corrected quickly.

Anti-corruption and counter-terrorism laws and enforcement are a permanent feature of our modern, global business environment. Real estate professionals who have not gotten this message yet will have plenty of time to bone up on the law once they’re behind bars.

Corruption Perceptions Index Map

CRE and Third-Party Compliance

VeryClean

HighlyCorrupt 0 - 9 90 - 10080 - 8970 - 7960 - 6950 - 5930 - 3920 - 2910 - 19 40 - 49

Sources – FCPAblog.org, Association of Corporate Counsel

What can U.S. companies—and CRE departments in particular—do to mitigate the risks related to FCPA? The answer starts with awareness training for anyone who engages foreign officials as well as a robust set of internal controls to ensure compliance by CRE department members and third-party agents.

The old way of doing business by greasing a few palms is gone. There is no set of circumstances where the almost-certain risk of getting caught is worth the potential benefit of a slightly swifter approval process or inside-track on a deal.


Global Hot SpotsMost investigations have occurred in China highlighting both the volume of commerce between China and the U.S. and also the potential for corruption when dealing with Chinese and other eastern government agencies and contractors. In fact, a majority of the world’s countries are perceived to be permeated by public sector corruption, making FCPA compliance challenging for U.S. companies seeking rapid global expansion.

The Corruption Perceptions Index, rates 175 countries by their perceived level of corruption. Countries seen as corruption-prone are outlined in various shades of red, while relatively “clean” countries are shown in yellow.

A recent study by DTZ and Unwork identifies seven emerging trends that will transform the workplaces of financial organizations, based on interviews and workshops with financial sector decision-makers who are driving change and championing innovation within banks.

More than 100 key financial services firms shared their views on the forces that change the way they think about workplace and property. Those forces include new regulations, talent attraction and retention, changing technology, intensifying cost pressures, and geographic considerations. Based on these in-depth discussions, DTZ and Unwork developed seven key findings and predictions of ways the banking industry will change regarding property, work and workplace over the coming few years.

Seven Trends Shaping the Future of the Financial WorkplaceFinancial sector leaders cite technology, talent, and regulation as key drivers of workplace trends

Property-Free Expansion

As more customers adopt online banking practices, financial services firms will expand their service offerings and product portfolios without a proportionate increase in real estate.

2.

Flight from CBDs

Banks will relocate more core operations out of traditional Central Business Districts and into urban work-live-play environments in order to attract and retain talent.

3.

Building Walls: Separation and Control

Banking leaders are concerned that regulation, compliance and risk mitigation strategies will constrain their ability to develop innovative and productive workplace strategies. But banks can and should challenge the assumption that regulation stifles innovation.

1.


Investment in Workplace and Technology

As banks increasingly compete with technology and media firms for bright young talent, they will adopt more innovative workplace strategies and invest significantly in technology.

4.

The Mobile Revolution

Consumerization—the adoption of consumer technologies in business operations—and outsourcing of technology will become the norm, as banks realize the need to adopt new models for technology and systems development and employees demand technology that meets their individual needs.

5. Omnibank: Physical Meets Digital

Banks are recognizing opportunities to focus on their high street-level presence and the disappearance of local transaction processing to drive a new, service-led model of retail banking that enables a more interactive customer relationship.

7.

Back-Office Shrinkage

Automation will continue to replace many back-office and middle-office workers, resulting in a significantly reduced real estate requirement.

6.


To read the full report, visit www.dtz.com/workplace

The future of the financial workplaceIdentifying the future trends for work and the workplace in the financial sector

http://www.dtz.com/workplace

North Shinagawa

ToranomonShibuya

Otemachi/Marunouchi

Tokyo4

Hong Kong7

7

Seoul

Beijing9

Mumbai

Singapore 6

Shanghai5Hongqlao

Jing’an

Century Park

Xuhui Binjiang

North Bund

Qiantan

Tangdong

CBD

Yizhuang

Wangjing

CBD Eastward Extension

Tongzhou

Fengtai

Shangdi

Lize Financial

Zhongguancun

5

CBD

Digital Media City

Pangyo Techno Valley

YBD KBD

Island South

Wanchail/ Causeway Bay

Sheung Wan/ Central Admiralty

West Kowiooh

Kai Tak

Kowioon Bay

Kwun Tong

Xuhui Binjiang

Paya Lebar

ChangiBusiness Park

MediapolisJurong Lake District

Raffles Place

Goregaon

Lower Parel

CBD

Wadala

Bandra Kurla Complex Navi Mumbai/

Seawoods

Vashi

Accelerated Emergence of Alternate Office Hubs in Asia:Multiplication of Choice in the Increasingly Multi-centered City

Simultaneously dense, sprawling and heterogeneous, Asia’s gateway cities of Tokyo, Beijing, Shanghai, Mumbai, Seoul, Hong Kong, and Singapore are all driving forces in the APAC regional economy. With the pattern of their business activity increasingly configured along the lines of complex urban networks, how these networks are configured is increasingly shaped by the globalization of capital and the rapid growth of new-economy businesses that are both flexible and information-intensive. Within the overall geographical reconfiguration of the operation of business, town planners in Asia’s gateway cities are increasingly inclined to encourage development of clustered forms of economic activity. However, it should be underscored that the very different spatial and socio-economic character of each city directly shapes its individual capacity for urban change. More specifically, the geographic constraints and development histories of each city have directly determined the strategies that have been settled upon in the re-configuration of their office hubs. In this paper, we explore four different major approaches that the seven cities have adopted, namely extension of existing Central Business Districts (CBDs), formation of new CBDs, creation of industry specific hubs and creation of decentralized back-office areas.


Extend current CBD

Generally speaking, with respect to Asia’s major gateway cities, lack of available land for further expansion in core urban areas is pushing town planners and policy makers in the direction of forming new CBDs, creating new non-core, industry-specific hubs as well as decentralized office areas. Indeed, Beijing is one of the few Asian gateway cities that still has a substantial tract of land directly to the east of the core CBD, which is currently under active preparation for generation of a CBD Eastward Extension district.

In Singapore, in a similar if smaller scale urban design move, pressure on Raffles Place CBD will be alleviated via the expansion of the Southern Waterfront, which is planned to be a mixed-use district connecting Marina Centre to future commercial developments along the Rochor and Bukit Timah canals.

In Mumbai, as the developable land bank in Bandra Kurla Complex is now nearly exhausted, immediately adjacent Kalina is relieving the escalating pressure building on the area, formerly referred to as “the New CBD,” which at the time of its inception was intended to be a new growth center designed to arrest further over-concentration of business activities in the southern city.

As one of the most mature office markets in Asia, Tokyo is not slated to physically extend its CBD, but to upgrade a number of non-core or underutilized areas that lie within the core Central Five Wards. This will involve upgrading the Toranomon District into a major new core area, not far from Marunouchi / Otemachi. A similar plan exists to reposition Shibuya,which is already a core business area but provides the smallest office stock amongst Tokyo’s Five Wards. Additional plans include redevelopment of a rail yard site in Minato-ku, North of Shinagawa, which is strategically positioned within the Tokyo CBD and which has unrealized development potential, from non-core to core status.

In Shanghai, home to the second-largest stock exchange in the world and one of the most active centers of corporate formation in China, developable land in Lujiazui CBD was exhausted nearly a decade ago; and office vacancy is currently very tight. Hence, new business precincts in the North Bund, Tangdong and Century Park have been launched, specifically to capture spillover demand from Lujiazui.

Form new CBD

Demographic growth as well as economic and technological change are giving rise to new networks of urban development. Asian gateway cities, while retaining their grid and older core commercial areas, are also becoming increasingly decentralized. Furthermore, as cities like Mumbai, Beijing, and Shanghai attain population sizes of over 20 million, the former notion of a “city” as a very discretely defined physical entity is giving way to multi-centered urban regions.

An expanding urban footprint of global capital, including IT infrastructure of related support systems, is propelling the rapidity of this change. Hence, while Asia’s entry into the Internet age has completely scrambled the former center periphery urban logic, the forces driving expansion towards the urban periphery are simultaneously counterbalanced by the fact that many major Asian corporate occupiers still seek core, centralized urban locations as the ideal staging ground for their command and control operations.

However, in the absence of viable inner-city sites close to the existing CBD, cities such as Mumbai, Shanghai, Hong Kong, and Singapore have no alternative but to generate new CBDs in disused or underutilized inner-city urban areas. In Mumbai, lack of development land for expansion in the Nariman Point CBD led to the regeneration of the former center of the city’s textile milling industry into the Lower Parel/Worli, Prabhadevi “extension CBD.” The same lack of quality inner-city expansion space also led to the development of the now nearly saturated Bandra Kurla Complex (BKC), with Wadala, a central suburb of the city of Mumbai, now on the drawing boards for transformation into the city’s fourth financial center.

In Hong Kong, constraints imposed by the city’s relatively small size and lack of developable land have determined that urban change over the next decade will be focused on regeneration of former inner city industrial areas. When this revitalization

work is completed, the relationship between Hong Kong Island and Kowloon will change, as the concentration of new Grade A office developments in Kowloon East will sizably outstrip the total quantum of stock in Hong Kong Island’s traditional core business district areas.

On a more modest scale, the Singapore government intends to relieve mounting pressure on the Raffles Place CBD by promoting the emergence of two other alternate business areas, namely Paya Lebar Central and Jurong Gateway, upgrading them from their current status as moderate-sized suburban commercial nodes into business districts in their own right.

In Shanghai, establishment of the Lujiazui Financial District in Pudong temporarily marginalized the Changning District in Puxi, but it subsequently came back strongly with the establishment of the Hongqiao Transportation Hub, which ties together HSR, light rail, metro and air transport in probably the biggest single transportation nexus in China. Situated at its center, the Hongqiao BD, will emerge over the mid-term as an appealing headquarters location for companies seeking to leverage off of this dense connectivity. Over the longer term, the area of Qiantian in Pudong, which is situated south of the Expo site and along the banks of the Huangpu River, is planned for development of an entirely new commercial hub, with a total planned construction area of 3.5 million square meters.

In Beijing, as China’s pre-eminent center of the state-affiliated financial industry, the city’s largest financial district, Financial Street, has very little future opportunity to expand. Consequently, the new Lize Financial District, which will be the last major new business district developed within the 3rd Ring Road, effectively functions as an extension of Finance Street five kilometers away. Currently in the planning and market positioning stage, Lize is targeted to reach maturity by 2020, with a total planned area of 6.5 million square meters, comprised mostly by commercial complexes targeted at occupiers such as major financial corporations and government agencies.


Create industry specific hubsGenerally speaking, industries that require continuous innovation in order to adapt to volatile external conditions are most likely to emerge as forces driving the emergence of

new industry specific clusters. In Asia’s leading commercial centers, the accelerated fast forward fuelled by capital’s increased mobility in the information age and the growth of e-commerce and Internet finance are major forces driving requirements for new business hubs. This leads to complex redrawing of the boundaries of urban space. More specifically, it is giving rise to new IT hubs and digital industry nodes. This phenomenon is also associated with new forms of geographical dispersal of business, as the urban grid of Asia’s gateway cities becomes increasingly spread out and multi-nodal. This effect is particularly evident in Asia gateway cities such as Beijing, Shanghai, Mumbai, Seoul, and Singapore where the tools of town planning have been directly deployed to establish platforms of support for information-related industry.

China established the Shangdi Information Industry Base as part of Beijing Zhongguancun Science Park 10 years prior to the 1996-2000 dot.com boom. Development of the Shangdi North Zone is basically focused on attracting headquarters of large IT-industry companies. As a result of its improved mass rapid transit connectivity to central Beijing, Shangdi has attracted many of China’s largest domestic high-tech, social media and IT companies. Shanghai, which is focused more on media than information technology, is planning to transform part of the Puxi Xuhui Binjiang area into a West Bank Media Port, and is positioning this area as a future world-class media and cultural industry cluster.

Seoul’s Digital Media City (DMC) was conceived at the outset as a state-of-the-art digital media entertainment cluster. Launched for development in 2002, the DMC is positioned as a platform for supporting Korea’s advanced IT, human resources and entertainment industries. Seoul’s more recently emerged IT/ITES industry hub, Pangyo Techno Valley, continuously under development since 2004, is intended to provide support to four new industries, namely IT, Bio Technology, Nano Technology and Cultural Technology.

Limited availability of land in the central city has pressured commercial development to move toward the north of Mumbai. The Goregaon Mindspace IT Park in Goregaon was amongst the first major commercial developments in the northern fringe area. However, as connectivity improved and vacancy levels dropped, Mindspace’s rental values rose significantly, creating a need for companies to look for low-cost alternatives. The construction of newer IT parks in Airoli exactly fulfilled this requirement for new, low cost emerging IT/ITES hubs. Following the lead set by Mindspace IT Park, Malad has been brought forward as the next new suburban IT/ITES industry hub.

In Singapore, one-north is a business park developed as a R&D and high technology cluster, and focused on accommodating biomedical sciences, infocomm technology (ICT) and media industries. Situated near Singapore’s largest educational and research institutes, the business park sub-divides into seven precincts, including Biopolis, Fusionpolis, and Mediapolis.

Decentralize back officesThose Asian cities that are the center of operations for companies with large office workforces that are

engaged in non-client interfacing business activity share a growing need for decentralized business space. In some cities, this trend is further reinforced by their emergence as major players in global BPO or KPO industry, which does not require front-office space. In many respects, the rapid emergence of decentralized office hubs and suburban business parks in cities like Mumbai, Beijing, and Shanghai positions them to lead this trend amongst Asian gateway cities.

Yizhuang ETDZ Zhongguancun Science Park was repositioned into an urban fringe business park in 2010 and renamed Yizhuang BDA (Beijing Economic and Technical Development Area). Along with improved mass rapid transit connections to the central city, Yizhuang successfully attracted several major corporations to acquire or develop headquarters properties within its precinct.

Located in a former industrial area in southwestern Beijing, Fengtai Advanced Business Park (ABP) is a new purpose-built, decentralized

business hub intended to provide a cost-saving alternative for Beijing office occupiers with large office workforces and who do not have the option of relocating away from the city. Designed to accommodate nearly 1,000 enterprises, Fengtai ABP has already attracted a number of China social media firms to relocate large-scale central city office operations into the park.

In Mumbai, the great success of the Goregaon Mindspace IT Park has spawned many imitators. Like the already operational Airoli, the emerging Seawoods, located in Navi Mumbai PBD, will be largely focused on capturing the back-office operations of major IT/ITES companies.

Launched in July 1997, and located next to Singapore’s Changi Airport, the 66-hectare Changi Business Park has, since its inception, devoted a portion of its space to accommodating back-office operations of many locally based MNCs. The Singapore government clearly understood that in order to remain competitive it would need to offer prime downtown office occupiers more cost-effective options for housing their back office operations.

CBD

Digital Media City

Pangyo Techno Valley

YBD KBD

Seoul

Xuhui Binjiang

Paya Lebar

ChangiBusiness Park

MediapolisJurong Lake District

Raffles Place

Singapore

CBD

Yizhuang

Wangjing

CBD Eastward Extension

Tongzhou

Fengtai

Shangdi

Lize Financial

Zhongguancun

Beijing

Goregaon

Lower Parel

CBD

Wadala

Bandra Kurla Complex Navi Mumbai/

Seawoods

Vashi

Mumbai


Alternate Hubs

Conclusion: Multiplication of corporate location choice in the increasingly multi-centered Asian gateway cityWe observe that as CBDs have begun to produce distant satellite areas and business districts are emerging based on proximity to transportation networks, one result has been the disarticulation of the former central city focus of urban planning for office use.

The implications of these poly-centric cities include greater range of options for companies seeking to expand, retrench or otherwise restructure their leased office portfolios. Corporate real estate executives who can fully assess the cost and benefits of all options can greatly enhance their ability to attract labor and optimize cost in setting office location strategies in Asian gateway cities.


Asia Pacific is 21.5% morespace e�cient

than North America

ASIA PACIFIC EUROPE NORTH AMERICA

MUMBAI

MALMOPRAGUE

SÃO PAULOHELSINKISYDNEYCALGARY

DUBLIN

SHENZHEN

ABU DHABI

SAN FRANCISCO 0

30-30

20-20

25-25

15-15

5-510-10

LONDON (WEST END)

HONG KONG: 31% cheaper

NEW YORK: 38% cheaper

SAN FRANCISCO: 51% cheaperTOKYO: 59% cheaperMUNICH: 63% cheaperSINGAPORE: 64% cheaper

MONTREAL: 77% cheaper

SHANGHAI: 70% cheaper

LONDON WEST ENDLondon West End is the most expensive location in the world. How many times cheaper are other key cities on a cost per workstation basis?

20142008

2008 vs. 2014

*on a per workstation basis

New York is 48% cheaper than

it was in 2008*

Global

2%

1%

1%

Occupancy costs have

increased inover 61% of markets in

the past year


decreased inover 37% of markets in

the past year

HYDERABAD

BUCHAREST

NAIROBI

DALLAS

GLASGOW

DUBLIN

SAN FRANCISCO

LONDON (WEST END)

+

-

SYDNEYCHICAGOBENGALURU

PARIS

LONDON (WEST END)SHENZHEN

DUBLIN

MOSCOW

MUMBAI

PERTHFRANKFURT

ATLANTA

-35%

-30%

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-20%

-15%

-10%

-5%

0

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10%

15%

20%

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30%

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BARCELONAis 86%

cheaper than London

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than North America


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SHENZHEN

ABU DHABI

SAN FRANCISCO 0

30-30

20-20

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LONDON (WEST END)







20142008

2008 vs. 2014



it was in 2008*

Global

2%

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1%



the past year



the past year

HYDERABAD

BUCHAREST

NAIROBI

DALLAS

GLASGOW

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SAN FRANCISCO

LONDON (WEST END)

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PERTHFRANKFURT

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0

5%

10%

15%

20%

25%

30%

35%

BARCELONAis 86%

cheaper than London

West End

Occupancy Costs at-a-GlanceKey Trends and Highlights from DTZ’s Global Occupancy Costs - Offices Research Report


Cost of one Workstation in London

Value for Money


than North America


MUMBAI

MALMOPRAGUE


DUBLIN

SHENZHEN

ABU DHABI

SAN FRANCISCO 0

30-30

20-20

25-25

15-15

5-510-10

LONDON (WEST END)







20142008

2008 vs. 2014



it was in 2008*

Global

2%

1%

1%



the past year



the past year

HYDERABAD

BUCHAREST

NAIROBI

DALLAS

GLASGOW

DUBLIN

SAN FRANCISCO

LONDON (WEST END)

+

-


PARIS


DUBLIN

MOSCOW

MUMBAI

PERTHFRANKFURT

ATLANTA

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0

5%

10%

15%

20%

25%

30%

35%

BARCELONAis 86%

cheaper than London

West End



than North America


MUMBAI

MALMOPRAGUE


DUBLIN

SHENZHEN

ABU DHABI

SAN FRANCISCO 0

30-30

20-20

25-25

15-15

5-510-10

LONDON (WEST END)







20142008

2008 vs. 2014



it was in 2008*

Global

2%

1%

1%



the past year



the past year

HYDERABAD

BUCHAREST

NAIROBI

DALLAS

GLASGOW

DUBLIN

SAN FRANCISCO

LONDON (WEST END)

+

-


PARIS


DUBLIN

MOSCOW

MUMBAI

PERTHFRANKFURT

ATLANTA

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0

5%

10%

15%

20%

25%

30%

35%

BARCELONAis 86%

cheaper than London

West End


than North America


MUMBAI

MALMOPRAGUE


DUBLIN

SHENZHEN

ABU DHABI

SAN FRANCISCO 0

30-30

20-20

25-25

15-15

5-510-10

LONDON (WEST END)







20142008

2008 vs. 2014



it was in 2008*

Global

2%

1%

1%



the past year



the past year

HYDERABAD

BUCHAREST

NAIROBI

DALLAS

GLASGOW

DUBLIN

SAN FRANCISCO

LONDON (WEST END)

+

-


PARIS


DUBLIN

MOSCOW

MUMBAI

PERTHFRANKFURT

ATLANTA

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0

5%

10%

15%

20%

25%

30%

35%

BARCELONAis 86%

cheaper than London

West End

Global Space Utilization Standard Per Workstation

2014’s Biggest Risers and Fallers

Global Occupancy Costs Per Workstation

Looking Back on 2014: Regional Occupancy Cost Growth


than North America


MUMBAI

MALMOPRAGUE


DUBLIN

SHENZHEN

ABU DHABI

SAN FRANCISCO 0

30-30

20-20

25-25

15-15

5-510-10

LONDON (WEST END)







20142008

2008 vs. 2014



it was in 2008*

Global

2%

1%

1%



the past year



the past year

HYDERABAD

BUCHAREST

NAIROBI

DALLAS

GLASGOW

DUBLIN

SAN FRANCISCO

LONDON (WEST END)

+

-


PARIS


DUBLIN

MOSCOW

MUMBAI

PERTHFRANKFURT

ATLANTA

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0

5%

10%

15%

20%

25%

30%

35%

BARCELONAis 86%

cheaper than London

West End

ISSUE 1

from DTZ’s Global Real Estate ExpertsInsights and Trends

Documents

from DTZ’s Global Real Estate Expertssites.cassidyturley.com/GlobalOccupierServices/The... · from DTZ’s Global Real Estate Experts Insights and Trends The Coworking Revolution