2023 China Office Occupier Survey

CBRE’s 2023 China Office Occupier Survey was conducted from March 22, 2023, to April 21, 2023. A total of 315 respondents participated in the survey, which asked corporate occupiers a range of questions covering issues such as future portfolio planning, workplace design and improvements, and Environmental, Social and Governance (ESG) goals.

Rebound in confidence generates stronger demand

Confidence is strengthening among both domestic and foreign companies in China, with three-quarters of businesses expecting revenue growth in 2023.

Improved confidence is translating to stronger demand for office space, with 42% of companies stating their intention to increase their office footprint. While this represents an increase from 2022, it is significantly lower than the figure recorded in 2021. The increase in demand is largely being driven by domestic companies, with sectors including finance and business service continuing to harbour steady expansionary intentions. Demand is also picking up across the life sciences, TMT and manufacturing sectors.

Moderate growth expected as occupiers stay cost-focused

Expansionary intentions among office occupiers over the next three years are slightly stronger than those displayed in the previous three years, with moderate growth emerging as the preferred strategy among most companies planning to expand.

With a substantial 78% of companies planning to control or even reduce the proportion of real estate rental costs in overall operating costs, rental cost planning is clearly exerting a direct influence over corporate real estate strategy.

Expectations for greater facility usage rights and leasing flexibility are on the rise, with 60% of occupiers requesting the right to use shared office facilities, both within their leased building and across other buildings owned by the same landlord.

New technologies enhance space efficiency

With most employees returning to the office after the relaxation of pandemic prevention and control measures, there has been a noticeable shift in workplace strategies. Some 30% of companies now plan to increase the number of dedicated seats, a jump of 10-pps from 2022.

Due to the relatively minimal impact of remote working, the average office utilisation rate in China stands at about 67%, comfortably higher than many other regional and global markets. Occupiers expect to make greater use of advanced real estate technologies such as sensors to accurately gauge office usage and enhance space efficiency.

Obtaining a deep understanding of employee behaviour is increasingly seen as a prerequisite for implementing effective workplace strategies.

ESG adoption accelerates

Although employee wellness remains the primary ESG concern for companies, this year’s survey uncovered a considerable rise in interest in establishing net-zero emission targets, conducting energy audits, and implementing resource recycling.

Companies are also showing a greater acceptance of the green premium, with 16% of occupiers willing to pay higher rents for relocating to green buildings, and 28% contemplating sharing associated costs with landlords to upgrade buildings to meet green standards.