What was The Buzz in January?
Our monthly roundup of real estate industry news.
Here are a few of the stories that caught our attention in January. From the trend of commercial real estate firms leaning into AI, to the highs, lows and 2024 trends set for coworking, there’s lots happening in the property industry right now.
The trend of CRE firms leaning into AI has accelerated, with C&W announcing new Microsoft partnership
One of the largest commercial real estate brokerages is partnering with the world’s most valuable public company in its journey into artificial intelligence.
Cushman & Wakefield launched a new suite of Microsoft AI products for its brokers to use to become more efficient and competitive. The firm, which has 52,000 employees across 400 offices, will use three different Microsoft AI tools: Azure OpenAI Service, Microsoft Technology Centers and Copilot for Microsoft 365.
“With this next generation of AI, we have a unique opportunity to accelerate innovation at Cushman & Wakefield and across commercial real estate,” Microsoft Data & AI General Manager Laura Craig said in a release.
The trend of commercial real estate firms leaning into AI has accelerated since the launch of Microsoft-backed ChatGPT in late 2022. The industry’s largest brokerages have since launched a series of initiatives to use AI tools to enhance their workflows, strategies and outcomes for clients. Read more.
IWG expands its Homework Workspace locations to SW London neighbourhoods
IWG is opening three ‘state-of-the-art’ flexible workspaces across South London as the demand for hybrid working rapidly accelerates by partnering with established local workspace operator, HomeWork.
Adding to its considerable existing South London portfolio, the addition of IWG’s latest HomeWork locations in Wandsworth, Southfields and Fulham comes on the heels of the business posting its highest ever quarterly revenue and achieving rapid network growth, adding 867 new locations globally in 2023.
The HomeWork centres in prime South London locations will offer facilities including private offices, meeting rooms, co-working, creative spaces and coffee shops.
IWG already has a significant presence in and around South London, with many sites added to the network in the last 12 months to meet growing local demand, including the flagship Engine Room at Battersea Power Station. Further locations cover an expansive area and include Putney, Sydenham, Hammersmith (2 sites), Teddington (2 sites), Sutton (2 sites), Twickenham, Richmond, Kensington, West Kensington, New Malden, Bromley, Croydon (2 sites), Clapham, Lewisham, Vauxhall and Lower Marsh in Waterloo.
By bringing “high-quality” office space to the area, IWG is enabling local people to experience living in a ’15-minute city’, allowing workers to work close to their homes without commuting into central London. It also further enhances the offering to larger central London corporates looking for local space to serve their increasingly hybrid workforces. Read more.
JLL releases global occupier trends to watch in 2024
Amid ongoing global economic and geopolitical challenges, 86% of Corporate Real Estate (CRE) leaders globally are focused on reducing operating costs. They will spend strategically in 2024, balancing competing and overlapping priorities, but where will they focus that spend?
Forward thinking firms will seize the opportunity to rethink their property portfolios and adapt to new workforce demands, ESG priorities and technology innovation.
AI, and technology more broadly, is the thread that binds our 2024 trends. Firms will look to invest in areas that support their wider people, place and portfolio objectives.
In this article, we explore five themes impacting CRE in 2024. By no means an exhaustive list, the impact of these themes will differ between companies, markets, regions and industries. Read more.
WeWork’s UK subsidiary owes £730 million after ‘weaker than contemplated’ demand
WeWork’s top UK subsidiary posted a loss of £110 million in 2022 and said it owed nearly three quarters of a billion pounds to its US parent in signs the London office market’s sluggish recovery from the coronavirus pandemic has crippled its finances.
The firm said: “Although the company began to see some recovery from the impacts of Covid-19 through the membership fee and service revenue from WeWork’s international operating locations during the year, full recovery has been slower than expected in certain markets.”
London is one of WeWork’s biggest markets globally, with the UK generating around £1 in 6 of the firm’s worldwide revenues and the capital accounting for 89% of its UK offices. In total, the firm’s workspace sites in the UK generated a combined $493 million in sales in 2022, according to the firm’s US annual report. Read more.
Convene segments its portfolio of brands
Convene, which acquired etc.venues last year, is segmenting its portfolio to create a stronger distinction between its locations. Convene will focus on large, experiential events, while etc.venues will focus on small meetings and corporate training.
As part of this segmentation, 155 Bishopsgate and 133 Houndsditch in London and 810 Seventh Avenue and 360 Madison Avenue in New York City will become Convene-branded locations.
“Looking at the 39 locations across our portfolio, the four etc.venues locations that are being converted to Convene are best suited to accommodate the large, premium, and highly experiential events that the Convene brand is known for. And as our clients think about incorporating offsite meetings into their broader workplace strategy, the etc.venues brand will focus on serving small meetings, trainings, and events,” says Ryan Simonetti, CEO and co-founder of Convene. Read more.
