New data from Colliers International observed a growing trend for flexspace facilities in Melbourne’s CBD and Metro markets dating back to 2014, with the total amout of net leasable area of flexspace growing from approximately 20,000sqm to 187,790sqm in 2020.
Approximately 79.4 per cent of total flexspace stock was located in the CBD, signalling vast opportunities for the metropolitan market to capitalise on the growing trend.
Colliers International Metro Office Research & Forecast Report H2 2020 also forecast the flexspace office model was set to deliver more fledgling companies to metropolitan business precincts in the wake of the coronavirus pandemic.
Sami Schiavi, Flexible Workspace Specialist at Colliers International, said that most businesses were attracted to flexible workspace, given the ability to scale up or down with ease.
“With Flexspace businesses are not locked into long-term contracts, so they can can add or remove work stations in line with the operational requirements.
“This has been accelerated in the current climate as businesses are undergoing tremendous change, while operating very uncertain conditions,” Ms Schiavi said.
Recent Colliers International transactions at Vicinity Centre’s Chadstone Tower One and the Spooner family-owned Caribbean Park, Scoresby, highlighted the long-term benefit to landlords of incorporating flexspaces into their office buildings.
The landlords at these precincts, which both have Waterman Group-leased co-working office spaces, were rewarded for their foresight, as emerging companies that outgrew their flexible workspace arrangements within 12-24 months negotiated larger and longer-term tenancies within the same office precinct.
In the first deal, Melbourne-based property developer Blueways Group leased a 625sqm office space at the jointly owned Gandel Group and Vicinity Centres’ Chadstone Tower One, on a seven-year lease.
Chadstone Tower One, at 1341 Dandenong Rd, Malvern East, features over 15,000sqm of office space split over nine levels.
In Scoresby, Instacare leased a 400sqm site at Level 1, 37 Dalmore Drive, Scoresby, in the Caribbean Business Park, under a five-year lease term. The independent NDIS plan management agency had previously leased space in the attached Waterman Business Centre at 44 Lakeview Drive, Scoresby.
Both deals were negotiated by Colliers International Director in Charge of Melbourne East & National Director Rob Joyes, who said each tenant had started out being incubated in the respective precincts’ flexspace tenancies.
“The owners of Chadstone Tower One and the Caribbean Business Park were very early to see the benefit in introducing flexible office spaces at their precincts. People start to like the space they’ve moved into, as well as the accompanying benefits of the location, so when they outgrow the co-working space, they are eager to remain within the precinct,” Mr Joyes said.
“Those were both direct transactions with companies that started out with just two or three staff in flexi-working spaces and grew so much that they entered into negotiations with the landlords for more space, because they couldn’t see themselves leaving the location.”
“Metropolitan co-working office spaces have bounced back a lot faster than in the CBD during COVID-19, largely because the flexible working spaces are closer to where staff live. As these small companies realise that working from home can be quite disruptive, they know they can secure a 12-month tenure and then re-evaluate their plans,” Mr Joyes added.