The future of work in a post-pandemic world, according to experts

Several trends that have emerged during the pandemic are now determining the future of work, according to Colliers. 

The commercial real estate services provider highlighted that the increased demand for flexibility among workers, the tight talent market, shifting preference for quality commercial properties and the increasing appetite for workspaces that meet environmental, social, and corporate governance (ESG) standards as well as offers wellness features are now “shaping future business destinations”. 

Below are more detailed takes by the firm’s leasing experts on what trends will dominate each capital office market. 

 Sydney 

According to Jock Gilchrist, the national director from Colliers Sydney CBD, the flight to quality is commanding business decisions among office occupiers in the NSW capital. 

“Premium and A-grade office spaces are increasingly sought after to support hybrid working, which is here to stay, especially in Sydney. 

"While employers are still encouraging their people to spend time in the office each week, the amount of time varies company-to-company and industry-to-industry” Mr Gilchrist said.

 He added that with recruiters doing it tough to snag talent in a tight employment market, employers are now upping the ante when it comes to workplaces to entice prospective applicants. 

 “The battle for talents fiercer than ever and to support this, employers are seeking workplaces in great locations, with more collaboration spaces, new and re-conditioned fit-outs and high-quality amenities.”

 He also noted that environmental, social, and corporate governance (ESG) standards are coming to the forefront for occupiers and owners. 

 “[Developers] now need to make sure they can deliver or have a plan to deliver on such things as green electricity, carbon neutral goals, higher NABERS Ratings, Waste Management strategies and WELL Health and Safety ratings.”

 And such investments have been proven to deliver financial returns.  Astute landlords who invested in their buildings in 2020 and 2021 are now reaping the rewards of heightened demand, according to Dan Walker, director from Colliers North Sydney.

 “The battle for talent is fiercer than ever and to support this, employers are seeking workplaces in great locations, with more collaboration spaces, new and re-conditioned fit- outs and high-quality amenities.”

 “Key attracting factors for occupiers include wellness facilities, round floor lobby refurbishments, third spaces, co-working facilities, and ESG elements such as NABERS ratings as well as securing WELL and WiredScore ratings.” Mr Walker said.

Melbourne

Colliers noted that compared to other capital cities, the Melbourne CBD market will need more time to get back on its feet due to the series of lockdowns the Victorian capital saw during the pandemic. 

To bring back vitality into its central business district and restore its pre-pandemic vigor,  national director from Colliers Melbourne CBD Andrew Beasley said that office asset owners are putting in the investment needed to elevate onsite offerings.  

“Whilst well established assets are focusing on a flight to quality, we're seeing a strong focus from developers in the market on ‘Flight to Experience’ and meeting ESG requirements of major [corporations]” Mr Beasley said.

Some features that commercial asset owners are reportedly incorporating into their buildings include end of trip facility upgrades as well as flexibility and onsite wellness features. 

Looking forward, Mr Beasley expects that office occupancy rates will rebound in the coming months.  “The recent recall of ‘work from home’ recommendations by the Victorian Government should also start to impact occupancy rates in the Melbourne CBD as we move into the final quarter of 2022.”

Travis Myerscough, the national director from Colliers Melbourne East said that while the Victorian capital’s office  is in a league of its own when it comes to amenity, wellness and ESG offerings, owners are looking at innovative ways to continue improving their facilities to fit the changing needs of occupiers. 

“Existing buildings are also looking at ‘community days,’ to add to their commercial experience, including Salta which often provide food trucks at Nexus Corporate Park on a Friday, and competitions on the basketball or tennis courts for all tenants within the precinct to participate in

Brisbane

As for the Brisbane market, Matt Kearney, the national director for Colliers Brisbane CBD said that he expects the Queensland capital to continue being a favorite destination not just to work, but to live and play. 

Echoing statements from other market observers, he also expects a boost for the region’s office markets from its future status as an Olympic city. 

“[With] major infrastructure investment in preparation for the 2032 Olympic and Paralympic Games, Brisbane and Southeast Queensland is well and truly on the world stage.” Mr Kearney said.

The local market expert revealed that there are heavyweight firms that are seeking to plant their roots on the city’s office landscape - bolstering demand  for the market. 

 “We are also witnessing a strong pre-commitment trend in Brisbane from larger professional services organisations such as Deloitte, Minter Ellison, Gadens and BDO who now have certainty and confidence to [fulfill] their growth objectives.

 "We are also seeing developments like Waterfront Brisbane creating a sense of ‘FOMO' for occupiers in the Brisbane market,” he shared. 

In a move to ease the transition from remote to office work, Bo Veivers, the national director for Colliers Brisbane said that metropolitan office owners are also upgrading their offering by bringing the homely comforts to work Including pets in the office. 

"Speculative fit-outs also continue to be a major hit enticing tenants who don’t have the time or expertise to manage a fit-out but wish to obtain a high-quality workplace for their people, with minimal delivery risks." Mr Veivers said.

He reflected that flexibility is now the name of the game for most property owners.  “Landlords are also being flexible on lease terms by offering expansion and contraction rights, mainly for larger corporates acquiring over 2,000 square metres.”

Canberra

Aaron Bruce, the director from Colliers Canberra said that the ACT capital is also seeing an uptick in demand for prime office spaces. 

"Like most locations across Australia, Canberra [is] also witnessing major occupiers priors high-quality, well-located accommodation in a hope to attract and retain staff,” he stated.

With the city home to major government institutions, he added that flight to quality is one of the main agenda when it comes to finding a new workspace. 

“This is understood to be a priority for the Commonwealth Government, which is currently seeking over 100,000 square metres in the market on behalf of a number of departments,” Mr Bruce added. 

He said that high-quality end of trip facilities are being perceived as “vital" in occupier decision making, which are leading owners to make significant investments to bolster these highly-sought facilities. 

 “Building owners are having to get creative and offer experience and convenience to future proof their assets, while the mentality of the 9-5 workday is being dropped, and owners are thinking more broadly about what they can offer occupiers from 5-9 instead,” the local expert stated. 

Adelaide

Within the Adelaide market, an expert said that flight to experience, as well as maximising the use of the workplace are becoming key trends. 

“The new developments that are at or nearing completion are the result of large occupiers demanding more from their work environment.” according to James Young, the state chief executive of Colliers Adelaide. 

“This trend is providing greater clarity for the owners of A-grade offices who are looking to backfill vacancies and need to be as competitive as they can be in the ‘occupier market,” he added. 

Perth

With Perth’s CBD office occupancy rate back at 71 per cent and increasing, Jemma Hutchinson, the national director of Colliers Perth,  highlighted that flight to experience is the current focus for employers when it comes to workspaces. 

“Building owners are having to get creative and offer experience and convenience to future proof their assets, while the mentality of the 9-5 workday is being dropped, and owners are thinking more broadly about what they can offer occupiers from 5-9 instead.” Ms Hutchinson said.

The local expert also said “plug and play accommodation” is fast-becoming a must for buildings,  as tenants require immediate expansion space due to  the strong economy.

“The premium market is very tight, and we have seen a number of tenants miss out on their preferred options, so mooted developments are on the rise as tenants seek flight to quality despite limited premium supply available,” she stated/ 

“ESG, wellness and technology features are also trending in Perth, which is increasingly an option for pre-committed tenants as developers operate in a market of competitive rents and incentives in addition to rising construction costs.” 

“Tenants are being provided the option to upscale and adjust the rent to accommodate this.”