Trophy regional markets lose lustre as demand fizzles
A new report showed that regional lifestyle areas — particularly NSW and Queensland’s trophy markets — are now los...
There is no denying the pandemic has changed the way we work and live. Countless lockdowns and months of uncertainty forced businesses to find ways to keep things moving, and with that came the widespread uptake of remote working.
The pandemic presented a steep learning curve for all, in which management of wellbeing and productivity had to be considered alongside the incorporation of technology into every facet of work. Employers and employees alike are still trying to navigate this “new normal”, and as a result, we are seeing new trends emerge that present challenges and opportunities in equal measure.
For example, this “new normal” has given rise to a range of different hybrid work models, whereby employees work from locations outside of a corporate office, depending on what is needed in their role at any given time. The model may be flexible, allowing employees to choose which days to be in the office, or fixed, where their days in the office are set for them to allow for staff meetings and the like. The model may also be office-first or remote-first, meaning employees work mainly from the office and occasionally from home, or vice versa.
This hybrid model will present a challenge to some sectors, as it may be difficult to determine the size and features required from an office space on an ongoing basis. With a lack of visibility over how many people will be in the office on any given day, employers must consider their needs carefully before deciding what kind of property to lease or purchase.
Additionally, whilst hybrid working models are currently popular, recent data from Banner Asset Management’s Quarterly Property Report reveals a strong underlying preference for workers to return to the office once again.
Throughout the second half of 2021, we saw a positive flow of pent-up leasing demand in the prime office market, confirming there is an ongoing preference for well-located, high-quality office spaces.
Despite Melbourne office leasing markets being disrupted by multiple lockdowns, the city’s vacancy rate is expected to stabilise moving forward as confidence returns. Over the latter part of 2021, Melbourne’s central business district recorded positive net absorption of 36,800 square metres, and leasing inquiry and activity began to improve. Sydney office leasing markets showed tangible signs of recovery over the second half of 2021, with market transaction volumes totalling $7.52 billion. It is also anticipated that new supply of around 150,000 square metres is expected to become available in Sydney in 2022. As Australians continue to adjust to COVID-normal life, office leasing demand and occupancy rates are only expected to strengthen.
With Australia’s CBD office markets primed to rebound in 2022, the benefits of returning to the office are becoming increasingly clear. Working from home often means having to deal with makeshift desk arrangements with subpar ergonomics, along with an endless list of distractions. When working from the office, certain workplace standards are guaranteed. Adequate equipment and decent working conditions provided by offices ensure employees can focus on their work in a comfortable environment.
Offices are also highly conducive to building better working relationships. In-person meetings, spontaneous interactions and social catch-ups are much harder to replicate through a computer screen. Environments where employees can come together in a dedicated workspace encourage collaboration and the sharing of ideas. Empowering staff to build their networks and improve organisational culture has untold benefits for both employees and business performance.
In the current climate, employers will benefit from providing a premium office space, noting that wellbeing, sustainability, technology, and connectivity are particularly important in driving the collective best from staff. Providing a high-quality office space encourages higher levels of engagement and productivity, whilst allowing for a culture of information sharing and personal development.
Andrew Turner is the chief executive of Banner Asset Management.