Prime office spaces vital to incentivise return from remote work, experts say
The demand for premium office spaces continues to surge, reflecting a broader trend towards quality-driven workplace environments that transcend traditional notions of mere office buildings, according to a report by the Property Council of Australia.
The January 2024 edition of the Property Council’s Office Market Report, released biannually, revealed a slight uptick in overall CBD vacancy rates nationally, with non-CBD areas also experiencing a modest increase.
Despite the overall uptick in vacancy rates, prime office spaces across major capital cities maintained lower vacancy rates compared to secondary assets, underscoring the enduring appeal of quality-driven workplaces, the Property Council reported.
Vanessa Orth (pictured above), managing director of Lendlease Investment Management Australia, emphasised the evolution of workplaces into multifaceted environments fostering connectivity, productivity, and well-being.
“It’s about delivering beyond a tenant’s goals, to creating an experience their employees want, the unique things that create a sense of energy that draws people into the precinct,” Orth told the Property Council. “We identified these trends years before COVID, particularly around experience, amenity, wellbeing and sustainability, and have been creating precincts with these things in mind. If you look at Barangaroo, it’s a community that has its own identity, personality and attracts workers, tourists and the general public.”
Lendlease recently secured a lease renewal with KPMG Australia at Tower Three in Barangaroo South, reflecting robust tenant retention rates and strong demand for premium office spaces.
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Similarly, Charter Hall observed a surge in tenant demand for high-quality office spaces, evidenced by the commencement of main works construction at its $1.8 billion Chifley South development in Sydney's CBD. Charter Hall Office CEO Carmel Hourigan emphasised the increasing preference for best-in-class buildings among businesses, driven by a shift towards collaboration, innovation, and culture-building within the workplace.
Hourigan noted that the demand for premium office spaces reflects a redefinition of the office's role, beyond a mere workspace, to encompass collaboration hubs essential for fostering creativity and mentorship. She emphasised the importance of modern, sustainable CBD offices in incentivizing the return to office-based work arrangements in a post-pandemic environment.
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