Home of the REB Top 100 Agents

Is it time to rethink the value of office space?

By Juliet Helmke
07 April 2022 | 13 minute read
commercial office reb

The hybrid work environment has changed how offices operate, and one property group believes it should change how that space is valued as well.

Mirvac is calling for an overhaul in the metrics generally used to measure the effectiveness and suitability of our workplaces, following the growing desire for flexible and remote work options.

In collaboration with WORKTECH Academy, Mirvac has canvassed expert views to explore the need to shift from efficiency-based metrics to experience and human-centric metrics to reflect the true worth of the office for companies and their employees.

==
==

Traditionally, the value of office space is measured based on headcount per square metre. Essentially, how many people the space can accommodate.

With more and more employees working part of the time at home, the question has become less about whether the facilities provide adequate desk space for every employee, and more about how the space itself facilitates collaboration, community, and a healthy employee experience – does it add value to employees’ lives?

Forward-thinking execs have already realised that the only way office space will be used effectively in future is if it’s a place the employee feels is beneficial to them.

Campbell Hanan, Mirvac’s head of integrated investment portfolio, said that though workers were getting back into offices across the country, company heads shouldn’t be lured into thinking it was business as usual.

“As people return to the office in large numbers, we’re seeing a strong rebound in occupancy across our portfolio, reactivating our workplaces and enlivening CBDs. But the fact is, the way we work has changed forever, and with experience, culture, learning and connection now the focus, many existing fit outs are no longer fit for purpose,” Mr Hanan said.

This new reality had already started to exert an impact on the market.

“The reality is, only modern, high quality, tech-enabled, sustainable workplaces can support these new ways of working so demand is growing apace for prime and A grade space across all office markets, particularly from our large corporate customers,” Mr Hanan noted.

“As a result the bifurcation of office markets is becoming increasingly more pronounced, as prime vacancy rates improve while secondary grade stock faces headwinds,” he added.

The experts Mirvac and WORKTECH surveyed suggested a number of different metrics for measuring the value and effectiveness of a workplace, with the most popular being ESG – including the reduction of energy costs and carbon emissions – and employee wellness.

Paul Edwards, Mirvac’s general manager of customer and strategy, said that when it comes to employee wellness, office design and mental health can be inextricably linked.

“It’s no secret that wellness and productivity go hand-in-hand, and therefore should be of the utmost importance to employers and employees alike. Office spaces can also go a long way in supporting these goals by providing a calm and productive place of work with facilities such as meditation or exercise spaces, and there are new data streams being developed to help measure that,” Mr Edwards said.

In response to its own research, Mirvac is launching a pilot program across one floor of its Sydney headquarters to explore how a real-life office space can be used to enhance performance and collaboration and ultimately encourage people back into the office.

“The pilot space will be occupied by Mirvac people as a real life experiment with insights and data used to create workplaces of the future,” Mr Hanan explained.

“This kind of value can’t be measured by a focus on headcount alone. We need to adopt a new approach that recognises the true value that a next-generation workplace facilitates for an organisation”.

ABOUT THE AUTHOR


Juliet Helmke

Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.

Never miss a beat with

Stay across what’s happening in the Australian commercial property market by signing up to receive industry-specific news and policy alerts, agency updates, and insights from reb.

Subscribe to reb Commercial:

You need to be a member to post comments. Become a member for free today!

Do you have an industry update?