CBRE halves Hana expansion for 2020 as Covid-19 bites

CBRE will halve the expansion of its flexible office space business Hana while Covid-19 continues to cause disruption to business. During a Q1 2020 results earning call, CBRE chief financial officer Leah Stearns said the agent will slow the pace of expected Hana office openings in 2020 from 20 to 10 until the business has more clarity on the impact that Covid-19 has had on occupier demand. CBRE president and chief executive Bob Sulentic said: “Our expense for Hana last year was around $40m (£32.5m). I believe this year, we’re going to bring that down some because we’ve slowed the rate upon which we’re adding new Hanas. “We thought we’d get to 20 this year, we’ll probably get to 10.” However, Sulentic remained bullish on the opportunities that could arise out of the need for flexible office space post-lockdown. He said high-quality flexible office space is “going to be quite attractive to some subset of occupiers” who need to serve staff working from home and unable to come into large-scale offices. “Hana from day one has been higher quality, less dense, very strong on data security,” he said. “We think it’s a product that very likely could play quite well going forward.” He added the agent “would benefit” from an inevitable increase in outsourcing as companies attempt to control costs, and said that the flex space market will pick up for the business despite coronavirus disruption. “We’re in discussions with some landlords on this that landlords that want to control flex space in their own buildings,” he said. “We’re going to want to have somebody white label that for them because they do not want to try to build the infrastructure themselves to operate it. They just they aren’t going to have the scale to do that. So we’re hopeful that that could be one of the good opportunities for us coming out of the Covid-19 situation.” To send feedback, e-mail lucy.alderson@egi.co.uk or tweet @LucyAJourno or @estatesgazette