While it is highly likely that there will be a greater uptake of flexible working in the future, this trend will likely be absorbed by the market, like many previous technology and workplace trends before it.
Colliers International Managing Director, Office Leasing, Simon Hunt said, “While it is too early to determine the direct outcomes of the COVID-19 impact on the office environment, when we consider outcomes from past market interruptions the data shows that office space will continue to grow.”
“In my 30 years working in the office sector I have seen many pivotal events such as the GFC, SARS and introduction of Activity Based Working which were all predicted to drastically change our approach to working in the office; however our markets have bounced back from these events every single time and office space has experienced exponential growth.”
“In the last 10 years Australian CBDs have added 1.7 million sqm of space – how much will it grow by in the next ten years as a result of an uptake in space due to social distancing measures?”
According to Colliers International Research, historical data suggests that office space will continue to grow, despite an increase in working from home culture as a result of restrictions implemented due to COVID-19.
“Looking at Australian CBDs today, it may surprise some people that until 10 years ago, secondary grade space was the most occupied space in our CBDs. Since July 1993, when the data series began, the occupancy of prime grade space in CBDs has increased by 150% or 5.3 million sqm of additional space occupied,” said Anneke Thompson, National Director, Research at Colliers International.
“Remarkably, the occupancy of secondary grade space today is exactly where it was in July 1993, despite providing a cheaper alternative for occupiers. What this tells us is that the benefit prime grade office space provides in being able to effectively utilise technology and more efficient workplaces to get the best productivity out of employees is very highly valued by businesses.”
“One of the clearest correlations we have found as researchers of office markets is the relationship between white collar employment and prime grade occupancy; when overall employment increases, office occupancy also increases.”
An office environment brings immense value to culture, collaboration, well being, social interaction and mentoring, which cannot be emulated at home, and this sentiment has been echoed by company leaders.
Blader Tol, the general manager, Australia and NZ at WeWork cited the serendipitous conversations and ideas sparked by walking past someone in the office or catching up while making a coffee, which can’t be substitute by tech.
Meanwhile, Commonwealth Bank Chief Matt Comyn, said that modern workplaces were absolutely critical to driving customer outcomes, while Chief Executive and cofounder of Walker Corporation, Lang Walker, maintained that most people need regular contact with co-workers and people need the ‘see, hear and touch’ in business.
Simon Hunt says “When we consider our enquiry data and compare on prior year the numbers are slightly down but in total they are quite stable; in fact we’ve been tracking our enquiries weekly and the week of the 15th June we recorded more enquiries and more area than the same week in 2019 – so there is proof that occupiers are now becoming more active in the market and will continue to look for space.”
“As we’ve seen for the past 30 years, value remains a key priority for occupiers and we expect this trend to continue. As demand recovers it’s our view that occupiers will be seeking prime grade buildings that offer efficient floor plates, the best technology solutions, health and wellness space and flex options as we move into an environment where there is a greater uptake of flexible working.”