Office advice: Be flexible or fall behind
A focus on flexibility will be key for office landlords over the next stage of the supply cycle, according to research from agency Colliers International.
The trend has been evident over the past two years, with the relationship between tenant and landlord becoming closer to one of customer and provider, Colliers International national director of research Anneke Thompson wrote in a report to clients.
“Over the next supply cycle, those landlords that proactively meet this demand for customer focused and flexible working environments (shared facilities, customer experience technology platforms, expansion space, end of trip services, health and wellness spaces etc) will attract and retain the top occupiers,” Ms Thompson wrote.
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“And in turn, (those landlords will) build the most attractive investment portfolios in the market.”
The agency said net absorption of Sydney office space in second half 2017 was just 345sqm, but this hid underlying demand that was being absorbed by increased use of co-working facilities and landlord-owned shared facilities.
In Melbourne, by contrast, tenants absorbed 51,376sqm of space in the same period, Colliers says.
The education sector was the second largest source of inquiry in the city and also taking up more floorspace per worker than regular office tenants, as the space was needed for students as well as staff.
Amid low vacancy rates, net effective rents for premium space in Sydney were at $767 per square metre, while Melbourne premium space cost $510 per square metre, the report found.
Colliers International managing director of occupier services Doug Henry tips the trend to flexible space to grow this year.
“Long lease terms are becoming a hindrance and by utilising flexible workspace an occupier can often minimise risk and cater for growth while ensuring access to third spaces, meeting rooms, event areas and training rooms,” Henry says.
This article originally appeared on www.theaustralian.com.au/property.