CBRE RESEARCH

ASIA PACIFIC
OCCUPIER FLASH SURVEY
 CBRE RESEARCH | ASIA PACIFIC OCCUPIER FLASH SURVEY | EXECUTIVE SUMMARY
CBRE Research recently conducted a flash survey of over 250 occupier clients in Asia Pacific to gauge the industry response to the COVID-19
outbreak. The key findings of the survey – which was conducted from March 23, 2020, to April 6, 2020 – are summarised below.

51% 2/3 84%

expect the business plan to INCREASE THEIR
have experienced DELAYS TO
environment to INVESTMENT IN TECHNOLOGY
LEASING DECISIONS, such as
DETERIORATE IN H2 2020; to support remote working and
postponed site visits and
respondents from mainland Business Continuity Planning
cancelled expansionary
China are relatively more (BCP) after the outbreak ends.
plans; one-third stated there
optimistic. had been no impact at all.

24% 51% 77%

intend to increase their
still EXPECT REVENUE TO have held DISCUSSIONS WITH ADOPTION OF FLEXIBLE
GROW in 2020; tech firms LANDLORDS about relief WORKING.
are the most upbeat. measures such as direct
reductions, rental holidays,
longer rent free periods and

86% fit-out allowances.

44%
have adopted REMOTE 71% believe the outbreak will lead to
WORKING to cope with have NOT BEEN OFFERED ANY a stronger preference for
lockdown measures. RELIEF MEASURES by landlords. buildings with WELLNESS AND
ENVIRONMENTAL FEATURES.
Source: Asia Pacific Occupier Flash Survey, CBRE Research, April 2020.
ASIA PACIFIC OCCUPI ER FLASH SURVEY © 2020 CBRE, INC. 2
SURVEY RESULTS
 BUSINESS ENVIRONMENT EXPECTED TO DETERIORATE IN H2 2020
While just over half of respondents expect the business environment to worsen in H2 2020, those in markets that were affected by the outbreak
in the early months of 2020 displayed a more positive outlook. 29% of respondents in mainland China expect the business environment to
improve in H2 2020 – a result reflecting improved sentiment on the ground, with most corporates now having resumed business.
Q1. Compared to H1 2020, do you expect the business environment in H2 2020 to be?

Mainland China
Wuhan Lockdown on 23/1
Taiwan
27% Travel restrictions on foreigners on 19/3
Korea
About the same Daegu Causal Lockdown on 25/2
Hong Kong SAR
Stricter restrictions on 25/3
22% Vietnam
Better National Lockdown on 1/4
India*
National Lockdown on 24/3

51%
Australia
Closure of non-essential business on 23/3
Japan*
Worse Declared a state of emergency on 7/4
Singapore*
Closure of non-essential business on 7/4
0% 20% 40% 60% 80% 100%
Better About the same Worse
*Note: Japan and Singapore introduced stricter restrictions after the survey was completed. A decision on whether to
Source: Asia Pacific Occupier Flash Survey, CBRE Research, April 2020.
extend the lockdown in India will be made the weekend of April 11-12. These developments may cause some respondents
to further adjust their business outlook for H2 2020.
ASIA PACIFIC OCCUPI ER FLASH SURVEY © 2020 CBRE, INC. 4
 REVENUE SET TO CONTRACT IN 2020 BUT BY A RELATIVELY MILD MAGNITUDE
While 65% of respondents expect revenue to contract in 2020, most expect the size of the decline to be under 30%. A quarter of
respondents anticipate further revenue growth this year. Respondents in the technology and telecommunications sector are the most
optimistic, perhaps reflecting the surge in demand for tech solutions since the outbreak.
Q2. By what percentage do you expect revenue to grow or contract in 2020?

40%
65% OF RESPONDENTS EXPECT Technology and
Telecommunications
REVENUE TO CONTRACT
35%
Manufacturing
30%

25% Healthcare and Life Sciences

20% Professional Services

15%
Real Estate
10%
Retail
5%

Banking and Finance

0%
Grow more Grow 10- Grow Flat Contract Contract Contract
than 30% 30% below 10% less than 10-30% more than
10% 30%
0% 20% 40% 60% 80% 100%

Grow Flat Contract

Source: Asia Pacific Occupier Flash Survey, CBRE Research, April 2020.
ASIA PACIFIC OCCUPI ER FLASH SURVEY © 2020 CBRE, INC. 5
 MOST OCCUPIERS HAVE INTRODUCED REMOTE/HOME WORKING
Government measures to enforce lockdowns, reduce travelling/social contact and close non-essential businesses have prompted many
companies to encourage or order staff to work from home. In markets where lockdowns have not been enforced, many companies have
adopted split team and staff rotation policies.
Q3. What responses/measures did you implement after the COVI D -19 outbreak?

Remote/home working 86% Market Remote/Home working policy

Staff have now returned to the
Mainland China
office
Non-urgent government staff;
Flexible working hours 61% Hong Kong SAR
discretionary for private sector
Taiwan Discretionary
Singapore Compulsory
Staff rotation (e.g. Team A & B) 45%
India Compulsory
Japan Encouraged
Split offices to separate key personnel 30% Korea Discretionary
Australia Encouraged
New Zealand Compulsory
Ceased desk-sharing and/or
activity-based working (ABW) 9% Thailand Compulsory
Malaysia Compulsory
Vietnam Discretionary
Use of flexible office centres 6%
Philippines Compulsory
Source: Asia Pacific Occupier Flash Survey, CBRE Research, April 2020. Indonesia Encouraged
ASIA PACIFIC OCCUPI ER FLASH SURVEY © 2020 CBRE, INC. 6
 SITE VISITS AND EXPANSION PLANS HAVE BEEN PUT ON HOLD
Two-thirds of respondents have experienced disruption to leasing decisions since the outbreak, with life science the most affected
sector. The impact of delays to such a high volume of real estate leasing decisions will continue to be felt in the coming quarters.
However, around one-third of respondents – including a high percentage of tech firms - said their decisions have not been impacted.
Q4. How have your real estate leasing decisions been impacted by the COVID -19 outbreak?

Site visits have been delayed/cancelled 36% 64% FOR LIFE SCIENCE OCCUPIERS
Expansion/new set up plans put on hold 35%
27% FOR OCCUPIERS IN CHINA
Not at all 33%
40% FOR TMT TECH OCCUPIERS
Relocation plans have been put on hold 26%

Capex for fit out has been reduced 23%

Renewals have been delayed 20%

Source: Asia Pacific Occupier Flash Survey, CBRE Research, April 2020.

ASIA PACIFIC OCCUPI ER FLASH SURVEY © 2020 CBRE, INC. 7

 TENANTS AND LANDLORDS ARE BEGINNING TO REVIEW LEASE AGREEMENTS
Many respondents in Greater China have already begun to review lease agreements with landlords and are requesting rental reductions,
rental holidays, longer rent free periods and fit-out subsidies – a trend expected to gradually emerge in other markets.

Q5. Have you held discussions with landlords on any the following aspects of lease
agreements?

No discussions have taken place 49% Responses by market

0% 20% 40% 60% 80% 100%

Japan
Negotiated rental reductions 36%
Korea

Singapore
Requested rental holidays (For existing tenants) 24%
Taiwan

Australia
Requested longer rent-free periods (For new lease) 17%
India

Vietnam
Requested fit-out subsidies 14%
Mainland China

Used flexible space provided by landlords 2% Hong Kong SAR

Source: Asia Pacific Occupier Flash Survey, CBRE Research, April 2020.

ASIA PACIFIC OCCUPI ER FLASH SURVEY © 2020 CBRE, INC. 8

 LIMITED RELIEF MEASURES HAVE BEEN OFFERED BY LANDLORDS
Over 70% of respondents stated they have not yet been offered any relief measures by landlords. Of those respondents who had
received offers, 22% expect landlords to be more accommodative amid the significant disruption to business.

Q6. Have you been offered any relief measures by landlords?

Yes, and we
Percentage of respondents who have not been
are satisfied
with these offered any relief measures by landlords
measures 100%
7% No 90%
71% 80%
Yes, but we 70%
expect landlords 60%
to be more 50%
accommodative
40%
22%
30%
20%
10%
0%

Korea

Australia

Japan*

Singapore*

Mainland China
Taiwan

Hong Kong SAR

India*
*Note: Japan and Singapore introduced stricter restrictions after the survey was completed. A decision on whether to
extend the lockdown in India will be made the weekend of April 11-12. These developments could lead to some
Source: Asia Pacific Occupier Flash Survey, CBRE Research, April 2020.
landlords reviewing their stance toward rent abatement.
ASIA PACIFIC OCCUPI ER FLASH SURVEY © 2020 CBRE, INC. 9
 FOCUS ON TECHNOLOGY AND FLEXIBILITY TO STRENGTHEN IN LONG-TERM
About 84% of respondents expect the outbreak to drive more investment in technology to support remote working, while 77% stated it
would lead to an increase in the adoption of flexible working. Other potential shifts in long-term occupier strategy include a stronger
preference for office buildings with wellness and environmental features.
Q7. To what extent do you expect there to be a shift in long -term occupier strategy in
the following areas after the COVID -19 outbreak?

Investment in technology to support remote working

Adoption of flexible working

Preference for buildings with WELL/Green features

Use of coworking space or serviced offices

Density of office space

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Increase No change Decrease

Source: Asia Pacific Occupier Flash Survey, CBRE Research, April 2020.

ASIA PACIFIC OCCUPI ER FLASH SURVEY © 2020 CBRE, INC. 10

 REMOTE WORKING WILL BE A KEY FOCUS OF BUSINESS CONTINUITY PLANNING
The adoption of technology to support remote working is expected to emerge as a central component of BCP planning after the outbreak.
More than a third of respondents (including 55% of manufacturing firms) expect to consider diversifying operating risk between different
markets, while half of banking and finance sector companies are mulling over splitting teams across multiple buildings.
Q8. Which of the following BCP measures do you expect to adopt after the COVI D -19
outbreak?

85% 37% 30%

Adopt technology to Review consolidation strategy to Evaluate the use of ABW

support remote working mitigate over-concentration risk during future outbreaks

24% 22% 14%

Consider splitting teams Further diversify operating Increase use of coworking

across multiple buildings risks between markets space/ serviced offices
Source: Asia Pacific Occupier Flash Survey, CBRE Research, April 2020.

ASIA PACIFIC OCCUPI ER FLASH SURVEY © 2020 CBRE, INC. 11

SURVEY PROFILE
 SURVEY PROFILE
• The CBRE Research Asia Pacific Occupier Flash Survey was launched between March 23 to April 5 2020.
• A total of 264 responses were received.

RESPONDENTS BY COUNTRY RESPONDENTS BY INDUSTRY

Others, 6% Real Estate
Korea, 4%
Technology and Telecommunications
Vietnam, 5%
Banking and Finance
Mainland
Japan, 5% China, 36% Professional Services

Retail
India, 5%
Manufacturing

Healthcare and Life Sciences

Hong Kong
SAR, 9% Transport and Logistics

Insurance

Singapore, Energy and Resources

Taiwan, 11%
10%
Australia, Flexible space operators
10%
Others

0% 5% 10% 15% 20% 25%

Source: Asia Pacific Occupier Flash Survey, CBRE Research, April 2020.
*Others includes: Education firm, Entertainment, Trading firm etc..
ASIA PACIFIC OCCUPI ER FLASH SURVEY © 2020 CBRE, INC. 13
 FOR MORE INFORMATION ABOUT THIS REGIONAL REPORT, PLEASE CONTACT
Asia Pacific Research
Henry Chin, Ph.D. Ada Choi, CFA Cynthia Chan Connie Chak
Head of Research, APAC/EMEA Head of Occupier Research, APAC Office Research Specialist, APAC Analyst, APAC
Head of Research, Greater China
henry.chin@cbre.com.hk ada.choi@cbre.com.hk cynthia.chan@cbre.com.hk connie.chak@cbre.com

Advisory & Transaction Services (A&T)

Manish Kashyap Paul Hubbard-Brown Emily Gray Tom Wicks
Head of A&T, APAC Executive Director, APAC Senior Director, APAC Client Solution Director, APAC
Global Head of A&T – Agile
manish.kashyap@cbre.com.sg paul.hubbardbrown@cbre.com.hk emily.medwaygray@cbre.com Thomas.Wicks2@cbre.com

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This report was prepared by the CBRE Asia Pacific Research Team, which forms part of CBRE Research—a network of preeminent researchers who collaborate to provide real estate market research and econometric
forecasting to real estate.

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