The changing real estate landscape for technology firms
The trajectory has shifted for tech companies who expanded rapidly amid the pandemic but are now re-sizing and reconsidering their real estate options, according to new report by JLL
Technology companies have been on the up and up over the past few years, but as inflation bites and revenues dip, they may well be thinking differently about how they manage their real estate portfolios from now on.
Footprint under scrutiny
In a report by JLL, titled ‘Technology office spaces: shifting to future-fit workplaces’, the property services giant found that between 2019 and 2021 the top 100 tech companies increased their office footprint by 6 per cent and the top ten employers expanded by around 1 million employees.
But 2023 has brought about a change in circumstances, and now the top priorities for tech companies are reducing operating costs, sustainability and portfolio reduction.
Technology firms also reported having more unused space in their offices than other industries, with tech companies offloading 10 million square feet of space to subleasing agreements in Q4 of 2022 and Q1 2023.
Hybrid working challenges
Hybrid working has also had an impact on tech company behaviour. More than half (55 per cent) of tech businesses report that more than half of their portfolios have been transformed for hybrid working, but this means that over 40 per cent of firms are still lagging behind, with spaces unready for a more flexible model.
Tech companies are also prioritising collaboration and socialisation in the struggle to get employees back to the office, with most identifying the commute as the core difficulty for encouraging in-office attendance. Tech companies are tackling these issues head-on with 12 per cent thinking about contributing to commuting costs and 31 per cent offering this perk already.
One in five tech companies (21 per cent) are sticking with all-remote work, but compared to other industries, the technology sector is also investing more in workplace technology and enhanced amenities for those working in-office.
Access the full JLL report here.