Climate, Talent and Energy Risks Force Companies to Rethink Location Strategies

REAL ESTATEClimate, Talent and Energy Risks Force Companies to Rethink Location Strategies
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Artificial intelligence, limited access to energy and demographic change could completely transform global business centres in the coming years, according to Colliers’ report Building Resilience: 5 Megatrends Redefining Corporate Real Estate. At the same time, the analysis shows that many organisations are still not prepared for the scale and pace of these changes.

The study indicates that the areas with the greatest potential impact on the future of business — such as the development of AI and rising demand for energy — are also those in which companies show the lowest level of readiness. The gap between the potential impact of megatrends and companies’ ability to respond to them is becoming one of the key strategic challenges for businesses around the world.

AI is changing business, but companies are struggling to keep up

Although artificial intelligence is now regarded as one of the main drivers of economic transformation and competitive advantage, many organisations are still at a very early stage of implementation. According to Colliers’ data, fewer than one-third of companies currently have a coherent strategy for using AI, while the rest are only planning to introduce it.

Moreover, even where projects have already been launched, their effectiveness remains limited. Only around one-quarter of initiatives deliver the expected return on investment, while in the case of generative AI, the share of failed implementations reaches as much as 95%.

At the same time, access to adequate digital infrastructure and highly qualified specialists is becoming increasingly important, already influencing corporate decisions on investment locations. This means that in the coming years, competition between cities and regions will increasingly focus on their ability to support the development of AI technologies.

Energy becomes the new bottleneck for growth

The rapid development of technology, especially artificial intelligence and data centres, is driving a sharp increase in demand for energy. According to the report, by 2030 the United States and China may account for almost 80% of the total increase in energy consumption by data centres worldwide.

In practice, this means that access to stable and competitively priced energy sources is becoming one of the most important factors determining the location of new investments. Companies increasingly need not only to analyse energy availability, but also to actively invest in improving the energy efficiency of their buildings and developing alternative power sources in order to reduce operational risk and costs.

“Just a few years ago, energy was mainly an operating cost for real estate. Today, it is becoming one of the key factors determining whether an investment can be developed. Especially in the case of data centres or modern logistics parks, access to stable energy at predictable prices is beginning to matter as much as location or transport infrastructure. More and more companies are now designing real estate around energy — taking into account local renewable energy sources, energy storage or long-term power purchase agreements,” said Dariusz Chrzanowski, Director of Energy Procurement Strategy at Colliers.

Climate change is rewriting the rules for business locations

Increasing climate risks are becoming an ever more important factor shaping companies’ location strategies. According to the Colliers report, the growing frequency of extreme weather events and long-term climate change are significantly affecting the risk profile of many key real estate markets. As a result, some established business centres may require costly adaptation measures in the coming decades or may lose investment attractiveness.

In addition, increasingly strict environmental regulations and rising expectations from investors and tenants mean that climate issues are becoming an integral part of business and real estate strategies. This requires companies to take into account both the resilience of assets to physical risks and their compliance with sustainability requirements.

Europe is ageing. Companies must look further for talent

At the same time, businesses are facing growing demographic pressure, particularly in Europe and North America. Ageing societies and a shrinking working-age population mean that access to talent is becoming increasingly limited. According to estimates cited in the report, by the end of the decade as many as 150 million jobs worldwide may be held by older workers.

In this situation, companies will have to change their existing human capital management strategies. This means not only greater investment in upskilling employees, but also a more global approach to recruitment and the adaptation of workplaces to the needs of different generations. Flexibility is also becoming increasingly important — both in terms of work models and office locations.

“Despite changes in the labour market, attracting and retaining key talent remains a major challenge for employers. The ability to create a work environment in which employees can effectively realise their potential is an important aspect of corporate strategy. In recent years, we have observed that more and more employers are moving away from a single universal work model, delegating responsibility for decisions concerning remote and office work to team leaders. In practice, this often means that different models operate within one organisation. When making decisions about the office, it is worth taking into account the diversity of space so that it adequately supports the needs of employees with different work styles and office attendance patterns,” explained Dorota Osiecka, Partner and Director at Colliers Define.

A new map of economic growth

Technological and demographic changes are going hand in hand with shifts in the global economic order. The growing importance of emerging markets, particularly in Asia, means that traditional growth centres are gradually losing their advantage. Forecasts suggest that the region may account for around 60% of global economic growth in the coming decades.

For companies, this means the need to diversify their geographic presence and search for new growth markets. At the same time, geopolitical tensions and changing supply chains are making location decisions more complex, requiring companies to consider not only costs but also risk and operational resilience.

How companies can prepare

In the face of these challenges, building organisational flexibility and resilience is becoming essential. The Colliers report indicates that companies should already be moving away from rigid real estate management models towards more adaptive solutions that allow them to respond more quickly to market changes.

Distributed strategies, such as the “hub and spoke” model, are also gaining importance. This approach makes it possible to combine main operational centres with smaller locations closer to employees and markets.

“Flexibility has become one of the key elements of real estate strategies. In a dynamic environment, companies need solutions that allow them to quickly adjust the scale and method of using space — both in response to team growth and changing work models. For this reason, organisations are increasingly including flexible offices in their strategies, treating them as an important element of building resilience and as a way to respond quickly to change,” said Robert Romanowski, an expert from the Office Agency at Colliers.

At the same time, companies should more closely integrate real estate decisions with supply chain planning and invest in solutions that improve energy efficiency and resilience to climate risks. The ability to combine these elements — technology, location, people and infrastructure — will determine competitive advantage in the coming years.

According to the authors of the report, the scale and pace of the changes ahead mean that postponing decisions is no longer an option. Organisations that take adaptive action today can not only reduce risks, but also use the transformation as an impulse for further growth.

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