About 4% of multinational companies in China have canceled their plans to either upgrade or expand office space, while nearly a fifth are rethinking whether to forge ahead with their previous plans, according to the latest survey from property consultancy JLL. But more than three-quarters of multinational companies in China said their plans were not affected by the pandemic. “Of MNCs surveyed, 77% said their leasing plans were not affected by the pandemic; 19% will re-evaluate their leasing plans after control measures are lifted,” the report said. “Only 4% have completely canceled their original expansion or upgrade plans.” Before the pandemic, more than half of the respondents had no plans for either upgrading or downsizing their offices, while 24% were looking to expand and 10% were set to upgrade. Meanwhile, 10% of the respondents were planning to downsize.
In MNCs’ five-year plans, 13% said they were likely to downsize, while 24% were not sure. On the other hand, 42% said they were likely to expand, while 21% said plans were unchanged. The survey was conducted from June 1 to June 18 this year with 150 companies in industries spanning financial services, professional services, technology, media and telecommunications, trading, manufacturing, retail and life science. The survey was done after Shanghai lifted the lockdown restrictions that limited the movement of the financial hub’s 25 million residents for two months amid a surge in Covid-19 cases. More than a third of the respondents, 34%, had their headquarters in the U.S., followed by a quarter from Europe, and nearly a fifth from Japan. Two percent of the respondents were based in Hong Kong, while the rest were from other parts of the world. Firms with office space of over 2,000 square meters accounted for 59% of respondents, while the rest had less than 2,000 sq m. Over a third of respondents were MNCs with over 1,000 employees.
“MNCs have grown more accepting of hybrid accommodations – with a large share of employees working remotely – since China’s most recent wave of the pandemic,” the report said. “More companies are developing comprehensive commercial real estate (CRE) selection strategies with increased attention to strategic factors such as environmental, social and governance (ESG), company branding, talent retention and business continuity plans (BCPs).” Meanwhile, 27% of respondents also said they were planning measures for potential closed-loop management with layout plan adjustments such as allowing employees to stay overnight in the office and putting up storage for daily supplies to support employees staying in the office. Nearly a third, or 31%, were also discussing this possibility, the South China Morning Post reports.
