The Current Office Market is Rather Confusing

IF WORKING FROM HOME is so appealing, why are businesses and governments choosing to hold onto their office space – and in many cases, lease even more?

According to the Property Council of Australia, Melbourne’s CBD towers were only 12% occupied in December – but 88% leased. And Sydney’s CBD towers were 23% occupied, but 91% leased.

Despite all the lockdowns, demand actually increased during the December half-year – rising by an average of 1% across the CBDs, and 0.7% in suburban office markets.

Most firms don’t really know how post-Covid life will play out.

Clearly, social distancing will have an impact on office layouts. But many organisations seem to be increasing their office footprint – to meet growth in staff numbers.

A recent CBRE/CoreNet global survey revealed the main focus will be “ensuring the health and safety of employees and providing a compelling workplace experience to attract and retain talent”.

Basically, most CBD firms view the office as crucial to their future – which is reflected in the increased demand for space.

There is definitely a flight to quality.

For older buildings, simply undertaking a major refurbishment will not necessarily guarantee the building’s attraction with tenants.

For workers to leave the convenience of a home office, they are looking for a number of perks. Things such as … being close to transit hubs; plus attractive amenities like gyms, restaurants and outdoor terraces.

Bottom Line: Minor building upgrades simply won’t cut it any longer. There has to be a total transformation of the building to ensure its success.

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