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More Australian businesses are planning to upsize or maintain their existing space than those preparing to downsize, according to new research.
Knight Frank’s (Y)OURSPACE report, which is published every two years, aims to present a survey of global business trends with respect to the real estate they occupy. The Australian findings show that post-pandemic, office culture is on the rise.
However, it should be noted that the margin of difference is not large. A total of 57 per cent of businesses surveyed in Australia indicated they would upsize (45 per cent) or maintain the same space (12 per cent), while 45 per cent said they would decrease their size requirements.
Whether that will have a noticeable effect on the office market remains to be seen, as an equal number of businesses planned to reduce size as those who said they would expand, with those maintaining the status quo making up the difference.
Knight Frank’s chief economist in Australia, Ben Burston, said the results showed that a significant number of companies were planning to make changes in an attempt to create the optimal working environment in an economy that is still adjusting to shifts brought about by COVID-19.
“Multiple changes to the operating environment are making it more difficult for corporate occupiers to make decisions on their office space,” he said.
“Uncertainty over the optimal long-term workplace strategy, the need to experiment with hybrid workstyles, adoption of new technologies, tight labour markets and volatile economic conditions are making for a challenging backdrop against which to make real estate decisions,” Mr Burston added.
In his view, however, the results were positive for office suppliers, as the responses indicated that firms still see office space as a critical part of their operations – if only that shifting requirements meant adjustments were needed.
“While the landscape is more complex, it’s clear that Australian corporates still perceive that offices have a critical role to play, with the majority of respondents envisioning a hybrid of office-first approach to workplace strategy and few expecting that remote working will be the predominant workstyle,” he said.
Knight Frank’s research found 63 per cent of Australian firms planned to maintain a hybrid workplace three years into the future, while 24 per cent said they were taking an “office-first” approach and 6 per cent said they would operate predominantly remotely.
According to Knight Frank’s global head of occupier research, Lee Elliott, Australian corporate occupiers are increasingly favouring high-end spaces that cater to collaboration and appear to prioritise employee wellbeing.
“Real estate plays a key role in driving collaboration and employee engagement, with every single respondent indicating it was a strategic device for their business,” he said.
“The flight to quality trend for office occupiers across the board is upping the ante on amenity, and what is expected from an office building.
“The Australian survey found the top three services and amenities staff were expected to demand over the coming years were cycle storage and facilities, food and beverage offerings and facilities supporting mental wellbeing,” he said.
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.
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