Thought of the Week
From cost to catalyst: How real estate is shaping business strategy in the C-Suite
March 6, 2025 4 Minute Read
How do business leaders figure out what they want from their real estate assets? And once they’ve decided, how do they ensure that they get it right?
Operational businesses exist primarily to make profits from making and selling goods and services, not to manage real estate portfolios – which is one reason why, historically, many have regarded real estate as little more than a cost item, and a substantial one at that.
But times are changing fast. In fact, real estate can make a positive contribution to achieving business objectives on a number of fronts. It can be an enabler of culture, productivity, and talent goals, for instance, as well as housing business-critical infrastructure. Equally, it can be less flexible than some fast-moving businesses would want, as well as having the potential to divert capital from other, core business activities. Maximising the benefits and minimising the downsides needs strategic vision and detailed execution.
Our inaugural survey, C-Suite Perspectives: Empowering Business Through Real Estate, finds that leaders see real estate as a strategic opportunity with latent potential to deliver value to businesses. In other words, there is recognition that real estate has a key role to play in contributing to C-Suite strategies, as well as an acknowledgement that further improvements are needed in order to realise this aim fully.
The survey canvassed the views of more than 250 C-Suite leaders, including CEOs, CFOs COOs, CTOs, and CPO/CHROs, across a range of geographies and sectors, including manufacturing, financial services, technology, healthcare, and retail. The vast majority (94%) see real estate as important to achieving business objectives; and half say that real estate will become even more important over the next three years. And while many (72%) view their current portfolios as positive contributors, the remaining 28% see their real estate, as currently configured, having a neutral or negative impact.
Behind all this is a desire among C-Suite leaders for their real estate to better support business resilience. Real estate already features in many areas of strategic decision-making, and there are some elements that leaders think will become more important value-adding priorities – notably increased portfolio flexibility – but also cost management, rightsizing, and supply chain resilience. All these will need a focus on generating and applying superior data and insights to drive more effective decision-making.
To reach these aims, C‑Suites want to be closer to their company's real estate decisions. Most organisations (97%) already have a globally or regionally centralised real estate function with a reporting line into the C-Suite. For most of them (60%), the reporting line is direct, and the majority (68%) of these direct reporting lines have been established since the COVID pandemic, reflecting the increased alignment of real estate with substantial business change.
There has been a great deal of attention paid to reporting structures in recent years and, as a result, half of companies consider that the level of engagement between real estate and the C‑Suite has increased over the past three years. Despite this, only just over half of C-Suite leaders see their engagement with real estate as fully effective, and three-quarters want more personal influence or involvement with real estate decisions. Clearly, additional efforts are needed to foster improved effective engagement between C‑Suites and their real estate.
Amid a growing realisation among leaders of real estate’s business contribution, there is plenty to play for. As our CEO, Ciaran Bird, highlighted when he spoke to Bloomberg last week, we wonder why real estate was not so much of a boardroom focus before the pandemic. Those who take pro-active steps to identify and exploit real estate’s untapped potential as a strategic enabler will gain most.
Thought of the Week
Contacts
Richard Holberton
Head of Office Occupier Research, Europe
Charlotte Kenna
Director, External Communications & PR
Related Insights
CBRE’s inaugural C-Suite Perspectives survey reveals that leaders see real estate as a strategic opportunity with latent potential to deliver value to businesses.