Xymax Real Estate Institute

TOPIC REPORT

Corporate

Activity

andWorkstyle

Reforms as Seen in Office Relocation
Companies are using office relocations as a chance for workstyle reforms

March 13, 2018

What are the characteristics of a company’s behavior when moving into a new office due to relocation or new
opening? Xymax Real Estate Institute conducted a questionnaire survey of companies that moved into a new
office between 2016 and 2017 to ask about the behavior of the person in charge from office search to moving
in, and about companies’ initiatives in workstyle reform, a movement that is becoming increasingly widespread.
This report summarizes the relationship between office demand and workstyles and the changes in such
relationship as seen in companies’ office relocation behavior, based on the results of the questionnaire.

Main TopicsIn terms of the type of office relocation, “relocation for expansion” was the most popular (46.6%),
followed by “new opening” (26.2%) and “relocation for downsizing” (13.6%), indicating robust
demand for offices.



The most popular reason for the relocation was “space became small due to personnel increase”(41.7%). 28.6% of companies chose “to heighten motivation of employees,” indicating companies’
high interest in employee satisfaction.



In choosing an office, companies placed the most importance in “rent,” “size of space” and“proximity to nearest station.” On the other hand, the top requirement that was forsaken was also
“rent.” This indicates that a certain number of companies increased their budget after struggling
to find an office that met their requirements.

In terms of difficulties companies faced between considering relocation and completion of the
move, the top replies included “narrowing down the properties,” “confirming the layout plan” and“negotiating contract terms (e.g. rent).”



60.7% of companies introduced a new office layout when moving into a new office in order toimprove workstyles. Specific examples include “an open meeting space,” “space for employees torefresh” and “ABW”*.



The most popular purpose of introducing a new office layout was to “improve comfort of theoffice space” (34.5%), indicating companies’ awareness toward employee satisfaction.

*ABW (Activity Based Working): A layout with a variety of work areas that can be chosen according to the work, such as booths for concentrating on solo workand space to collaborate in a team.

TOPIC REPORT: Corporate Activity and Workstyle Reforms as Seen in Office Relocation
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
Copyright © 2018 Xymax Real Estate Institute Corporation. All rights reserved.

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TOPIC REPORT｜Xymax Real Estate Institute
1. Companies’ behavior in office relocation
There are many types of office relocation. While some may be the moving of entire functions from the previous
office (ie, relocation), while others may be the opening of a completely new sales office or an integration ofmultiple offices to a single new office.
Asked about the type of office relocation, 46.6% of companies replied that it was a “relocation for expansion,”
followed by “new opening” (26.2%). On the other hand, “relocation for downsizing” and “office integration,”
which are generally factors for a decrease in floor space, were at the 10% level, indicating the strength ofdemand (Figure 1).
Figure 1: Type of Office Relocation(Multiple answers; n=206)

TOPIC REPORT: Corporate Activity and Workstyle Reforms as Seen in Office Relocation
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
Copyright © 2018 Xymax Real Estate Institute Corporation. All rights reserved.

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TOPIC REPORT｜Xymax Real Estate Institute
In terms of reasons for the relocation, the results indicated a robust corporate economic state as in Figure 1,
with top replies including “space became small due to headcount increase” (41.7%), “space became necessary
due to launch of new business” (22.8%) and “to strengthen recruitment” (22.8%). A rise in companies’ interest in
employee satisfaction was also evident, with 28.6% of companies replying that the reason for the move was “tomotivate employees” (Figure 2).
Figure 2: Reason for Office Relocation(Multiple answers; n=206)

TOPIC REPORT: Corporate Activity and Workstyle Reforms as Seen in Office Relocation
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
Copyright © 2018 Xymax Real Estate Institute Corporation. All rights reserved.

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TOPIC REPORT｜Xymax Real Estate Institute
From what perspectives do persons in charge of the process of finding an office to moving into an office searchfor offices? We asked them what factors they placed importance in when choosing an office and from among
them the deciding factor and the factors that they forsake in the end.
Figure 3: Important Factors in Choosing an Office(Multiple answers; n=206)

The top replies for the important factors and the deciding factors were “rent,” “size of space” and “proximity tonearest station” (Figures 3 and 4). This indicates that companies set their budget and necessary space
beforehand when looking for property.
However, the top requirement that companies forsook was also “rent” (Figure 5), indicating that a certain
number of companies had to increase their budget since they could not find an office that met theirrequirements at the rent level they assumed in the current tight market. The results also revealed that
requirements such as the “age of the property (young)” and “high-grade finish of exterior and common spaceof property” were forsaken in a relatively large number of cases.

TOPIC REPORT: Corporate Activity and Workstyle Reforms as Seen in Office Relocation
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
Copyright © 2018 Xymax Real Estate Institute Corporation. All rights reserved.

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TOPIC REPORT｜Xymax Real Estate Institute

Figure 4: Deciding Factors in Office Selection (Excerpt of Top Replies)

Figure 5: Requirements Forsaken in Office Selection (Excerpt of Top Replies)(Figures 4 and 5: Multiple answers; n=206)

TOPIC REPORT: Corporate Activity and Workstyle Reforms as Seen in Office Relocation
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
Copyright © 2018 Xymax Real Estate Institute Corporation. All rights reserved.

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TOPIC REPORT｜Xymax Real Estate Institute<Pick Up> What kind of offices do companies that aim to motivate employees require?
As we saw in Figure 2, 28.6% of companies replied that they were relocating their office “to motivate
employees.” Such companies may be more conscious of the impact of office environment on the
motivation of employees than other companies.
Then, what kind of office do such companies with high interest in office environment and employee
satisfaction actually require? We compared the important factors in office selection by labelingcompanies that chose “to motivate employees” as a reason for office relocation “Yes” and all othercompanies “No” (Figure 6).
The chart indicates that companies labeled “Yes” require more in offices than companies labeled “No”
since the former places greater importance on almost all requirements than the latter. The difference
was especially large in requirements related to workers’ comfort and safety such as “ease of laying out
the office,” “property's quake resistance, strength in line with new quake resistance standard,”“high-grade

finishoftheproperty’s

exteriorandcommonspace”

and“property's

cleaning/maintenance conditions.” On the other hand, the importance on “rent” was relatively low,indicating that such companies require a better office environment even at a relatively expensive rent.
Figure 6: Difference in the Importance of Requirements in Offices between Companies that Chose “To
Motivate Employees” as a Reason for Relocation and Companies that Did Not (Excerpt of Top Replies)*Companies that chose the reason are labeled “Yes” (n=59); those that did not are labeled “No” (n=147)(Multiple answers)

TOPIC REPORT: Corporate Activity and Workstyle Reforms as Seen in Office Relocation
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
Copyright © 2018 Xymax Real Estate Institute Corporation. All rights reserved.

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TOPIC REPORT｜Xymax Real Estate Institute
The most common difficulties that companies experienced between considering relocation and the completionof the move were “narrowing down the properties” and “confirming the layout plan,” both accounting for nearly
40%, respectively (Figure 7).
Figure 7: Difficulties Companies Experienced(Multiple answers; n=206)

Asked to freely describe the details of the difficulties, many respondents cited difficulties in finding a property
due to low vacancy rates and the rise in rent in recent years. Many also mentioned difficulties in practical work
since many respondents are thought to have come in charge of the work for the first time due to the low
frequency of projects such as office relocations and new openings. Excerpts of the free descriptions are shown
below.
■Reference material■ Free description of details of the difficulties (excerpt)
Difficulty in finding a property
・Could not find a property that met the budget.
・It was difficult to find a property of the required size in the required area.
・Since the previous rent was low, it was difficult to find a property of a similar rent level in a nearby location.
・It was difficult to choose since each property had its good points and bad points such as location, size, shape of theoffice and owner.
・There was no property that satisfied my requirements, which were: (1) close to the station; (2) parking lot in thebuilding; and (3) high grade. A property that offered a combination of (1) and (2) was especially difficult to find.
・Even if a property seemed good, there were some drawbacks such as old age and bad transportation facilities,
making it difficult to decide.

Difficulty in practical work・I was constantly ill at ease since I had to learn on the job due to it being my first office relocation and having nocommon knowledge of the procedures.
・Internal coordination such as the approval of management took time, resulting in a delay in the actual move.
・Explaining Japan’s rental office customs and rent level to the overseas head office, which have the decision-making
authority, and obtaining their understanding.
・There were too many internal points of contact and persons in charge, making it difficult for things to proceed.
・The timing of property search coincided with the peak season of business, resulting in difficulty in securing time forpreviews of candidate properties and checking the contract.

TOPIC REPORT: Corporate Activity and Workstyle Reforms as Seen in Office Relocation
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
Copyright © 2018 Xymax Real Estate Institute Corporation. All rights reserved.

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TOPIC REPORT｜Xymax Real Estate Institute・It was difficult to coordinate the timing of vacating the previous office and the moving into the new office.
・The price of the interior construction work contractor we had in mind was higher than expected and had to change
the contractor, resulting in a delay in the arrangement of construction work.
・Multiple defects due to aging were found after we started interior construction work prior to our move, affecting
the progress of the construction work.
・It was difficult to think of a layout that secured the necessary number of desks by arranging desks neatly in a small
amount of space.
・Even if the layout was fixed in the drawing it did not work out at the actual site, which led to many changes.
・Many additional costs were subsequently added, resulting in a greater cost for relocation than assumed.

TOPIC REPORT: Corporate Activity and Workstyle Reforms as Seen in Office Relocation
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
Copyright © 2018 Xymax Real Estate Institute Corporation. All rights reserved.

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TOPIC REPORT｜Xymax Real Estate Institute<Pick Up> Key words mentioned as requirements in the search of an office
A common way to search for an office would probably be to decide the broad requirements first andthen narrow down the candidates. Therefore, in this survey we asked respondents to describe theirrequirements of location, size of space and rent as well as the reasons. Since specific location names
and figures vary significantly, we classified the replies in terms of the pattern of words and the way
they are mentioned.
In terms of location, it was most common to specify a certain station (e.g. “around Shinjuku Station”)(43.7%), followed by a certain area (e.g. “Dojima area,” “around Yaesu”) (37.9%). Specifying wards andcities accounted for only 13.1% (Figure 8). The most popular reason for preferring a certain area was“it is close to the previous/current office” (25.7%), indicating that many companies look for an office inthe same area as their existing office (Figure 9).
In terms of the size of space, 86.4% of the companies replied a specific figure (in tsubo/square meters).
The most popular reason for the preferred size was “based on the number of workers in the office”(32.5%), followed by “comparison with previous/current office (simiar size, xx times, etc.)” (30.6%).
In terms of the reason for the preferred rent, most companies decided the preferred rent incomparison with the rent before the relocation or with existing offices (36.4%). There was also astrong intention to reduce costs, with “as cheap as possible” accounting for 21.8%. On the other hand,
5.3% of companies replied that they did not place emphasis on rent (they placed emphasis on factors
other than rent), indicating a difference in awareness toward office costs.
Figure 8: Preferred Area

Figure 9: Reason for the Preferred Area (Excerpt of Top Replies)*Locations/facilities necessary for business such as company head office, branch, store, plant, gov’t office, customs office and court.

(Figures 8 and 9: Multiple answers; n=206)

TOPIC REPORT: Corporate Activity and Workstyle Reforms as Seen in Office Relocation
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
Copyright © 2018 Xymax Real Estate Institute Corporation. All rights reserved.

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TOPIC REPORT｜Xymax Real Estate Institute

2. Workstyle Reforms on the Occasion of Office Relocation
Office relocation also seems to be a trigger for changing the previous way of working.
Companies that introduced (or plan to introduce) a new layout such as space for refreshing and ABW* with theaim of changing workstyles amounted to 60.7% of total (Figure 10).
*ABW (Activity Based Working): A layout with a variety of work areas that can be chosen according to the work, such as booths for concentrating on solo workand space to collaborate in a team.

Figure 10: Whether a New Layout was Introduced upon Moving into the New Office (Incl. Plans to Introduce)

Did not introduce a
new layout
39.3%

Introduced a newlayout upon moveto new office
60.7%(Single answer: n=206)

We believe that the background to this is the high barriers for office reform. As workstyle reforms gather
momentum, not a few companies must be facing issues in old-fashioned, fixed offices. However, it is not easy tocarry out drastic reforms while continuing day-to-day work at the office they currently use. In this regard, officerelocations and new office openings could be a chance for companies to pursue an office that offers a betterworking environment for employees and to change workstyles.
The specific layouts that companies introduced includes “an open meeting space” (39.3%), “space for
employees to refresh” (24.3%) and “ABW” (15.5%), which are multi-purpose spaces that can be used flexibly(Figure 11).
Figure 11: New Layout Introduced upon Moving into the New Office(Multiple answers;n=206)

TOPIC REPORT: Corporate Activity and Workstyle Reforms as Seen in Office Relocation
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
Copyright © 2018 Xymax Real Estate Institute Corporation. All rights reserved.

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TOPIC REPORT｜Xymax Real Estate Institute
The most common reason for introducing the layout replied in Figure 11 was to “improve comfort of the officespace” (34.5%).
Other top reasons included “improve employee satisfaction and motivation” (21.8%) and “encourage
employees to refresh” (19.4%), indicating an emphasis on the impact of the office on workers’ state of mind. On
the other hand, factors related to cost reduction such as to “reduce office costs” (14.1%) and to “improvetrouble and cost efficienty of layout changes” (10.7%) ranked relatively low (Figure 12).
Figure 12: Reasons for Introducing a New Layout (Excerpt of Top Replies)(Multiple answers; n=206)

Summary
In recent years there have been media reports of companies that relocate their office for workstyle reform.
However, we assume that most companies relocate their office out of more direct necessity. As we saw in Figure
2, more than 40% of companies that moved into a new office replied that the “space (of their previous office)became small due to headcount increase,” leading us to believe that many of the relocations are carried out
under restraints in time and property options.
This survey revealed that, even in cases of such relocations made out of necessity, not a few companies
required better offices in recognition of the impact of offices on workers’ comfort and motivation. This trend
has been confirmed in interviews with some of the respondent companies. For example, an IT company that
replied that they relocated their office for expansion to respond to an increase in headcount was aiming to
improve the comfort of employees under the order of the president by enhancing the space for employees torefresh and thus reduce job turnover.
The relationship between employee satisfaction and the office is a theme that every company we interviewed
showed high interest in. A rise of such awareness may change what companies require in an office. We hope tocontinue to capture such changes in trends through qualitative and quantitative surveys and analyses on officedemand at the time of relocation.

TOPIC REPORT: Corporate Activity and Workstyle Reforms as Seen in Office Relocation
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
Copyright © 2018 Xymax Real Estate Institute Corporation. All rights reserved.

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TOPIC REPORT｜Xymax Real Estate Institute

Survey Overview
Title

Questionnaire on Office Relocation

Survey period

June 2016–December 2017
The questionnaire was sent to tenant companies that moved into office buildings managed andoperated by the Xymax Group and companies that moved into offices through the brokerage of
Xymax Infonista (formerly Xymax Estate Design) around 2016 and 2017. Valid responses wereobtained from 206 companies.

Targets
Geographicalcoverage
MethodPrefectures in japan (Tokyo, Osaka, Aichi, Fukuoka, Kanagawa, Saitama, Chiba and others)
EmailProfile of Respondent Companies

Note on the charts contained in this report
・The sum of the breakdown of the %mix may not be 100% since the figures are rounded to the second decimal place.

Please contact below for inquiries on this report.
https://soken.xymax.co.jp

Xymax Real Estate Institute

PHONE: 03 3596 1477 | FAX: 03 3596 1478 | E-MAIL: info-rei@xymax.co.jp

TOPIC REPORT: Corporate Activity and Workstyle Reforms as Seen in Office Relocation
The contents of this report are as of the time of writing. Xymax Real Estate Institute does not guarantee their accuracy or completeness.
This report may not be reproduced, cited, transmitted, distributed, or reprinted without prior permission of Xymax Real Estate Institute.
Copyright © 2018 Xymax Real Estate Institute Corporation. All rights reserved.

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