Making data-driven decisions about your corporate real estate in the United States is challenging enough. But what about decision making at a global scale? In this article we’ll hone in on three key areas that corporate real estate leaders must consider: economic conditions, local regulations, and sustainability. Then, we’ll cover how you can stay ahead of these trends by utilizing the latest cutting-edge workplace technology.
Economic conditions
In 2019, many global economists predicted that the 2020s would be an extraordinary decade for international development. In fact, it has been extraordinary thus far, but not quite for the reasons expected. The World Bank’s Global Economic Prospects report now forecasts the first half of the decade to endure the slowest five years of worldwide GDP growth in the last 30 years.
Looking at 2024 and 2025, much of the world still faces a potential recession, although improvements in the US economy have reduced the potential for severe impacts. However, many developed countries still struggle with inflationary trends, while some developing nations project low growth and elevated inflation.
The World Bank projects global growth to drop from 2.6% in 2023 to 2.4% in 2024, well below the average growth during the prior decade. Developing countries are forecast for slow growth, while advanced countries will see even slower growth compared to the years between 2010 and 2019.
In some countries, including the US, England, and the EU, interest rate cuts in Q3 and Q4 of 2024 are widely anticipated. These cuts should stimulate growth, notably in real estate, which is tightly connected to credit availability.
In much of the world, office utilization has improved over the last year, particularly in Asia and Europe. While the US has not achieved the same increases, real estate leader JLL predicts it will continue to rise in 2024 and beyond.
Consider local regulations
The world economy is truly a global entity. US companies that want to grow must export to other nations and increasingly find it necessary to establish operations in multiple countries. Virtually every Fortune 500 company has operations in a broad representation of countries. The most often chosen are Canada, the UK, and Japan. That means these US-based companies must also comply with local regulations in the host country.
One recent example is the new data privacy regulations in the European Union, where AVUITY has recently opened a data center. Companies who work with partners that are able to measure and transmit occupancy data anonymously in compliance with local regulations are able to better optimize their global real estate portfolio as a whole. The company can collect and compare data by country, region, city, state, and more granular analysis of individual sites at the building, floor, area, and workstation level.
AVUITY has successfully implemented workplace technology projects in countries across the globe, highlighted in orange.
Global emissions and Sustainability
While the world economy and interest rates significantly impact real estate outlooks, other political and social issues also play a role in global and local prospects. For example, climate change is a crucial topic for international real estate prospects. The worldwide effort to mitigate the effect of climate change has become a relevant concern for the real estate industry. Some impacts are:
- Increased reporting requirements across the globe for real estate development impacts
- Employees and tenants demand sustainable buildings.
- Governments increasing emissions limits and regulatory hurdles.
Global consultant McKinsey noted the close association between real estate and global emissions, which are known to contribute to climate change. Thirty-nine percent of global emissions are linked to real estate, offering a tremendous opportunity for investment in mitigation efforts. The sources of emissions are both the materials used in buildings and the vast amount of energy that powers these buildings.
As noted, developers, investors, tenants, and governments all have a stake in global decarbonization efforts. Today’s Technology can help reduce these building-related emissions and yield positive economic results. Energy-efficient heating, cooling, and lighting systems create meaningful changes in energy usage.
As evidence mounts for the tangible effects of climate change, investors and regulators look for sustainability achievements, rewarding companies that are part of the solution rather than contributing to the growing problem. Global consultant PwC predicts that investors will become increasingly committed to companies that demonstrate commitment to sustainability.
Intelligent sensor technology can save energy and money
Occupancy sensors’ primary function is to collect data on space utilization, helping companies assess their space needs using accurate, comprehensive data about when and how office space is used. The sensor approach is highly effective and provides data that can compare usage data in individual sites, individual floors, and workstations or across an entire global portfolio.
However, some “all-in-one” sensors like VuAI can also collect environmental data, without the need for additional hardware. For example, the sensor system will also detect and report lighting levels, temperature, and humidity data. More importantly, the AVUITY sensor platform interacts with the building controls and can automatically adjust lighting and temperature controls to optimize both comfort and efficiency.
This advanced capability can potentially contribute to emissions reductions across a real estate portfolio, resulting in genuine savings without the need for additional sensors.
As global real estate managers respond to new challenges in the world economy and real estate markets, it’s helpful to recognize that as issues emerge, new solutions may be available to help address unexpected developments.
To learn more about how AVUITY can help with your global real estate decisions, request a demo today.
