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It’s easy to forget that liberated work began to take root long before 2020. In fact, even in 2019 only half of Australia’s offices were being fully utilised by staff, according to McKinsey.
So it’s no surprise that we now frequently see businesses altering the terms of their commercial lease upon expiry, as well as their space requirements, amenities and location.
After years of swelling tenant unrest and amid an increasing flight to quality, we know the battle for occupancy won’t be won by commercial landlords who simply offer discounted leasing rates. In fact, it will be quite the opposite. Trends show that tenants will be seeking landlords who can not only provide them the best in amenity, but also an unprecedented service experience.
Tenants want more than just an office space – they require hospitality
Australia’s office expectations have been raised, even if teams are only using their workplace a few times a week. Tenants are now looking at factors such as sustainability ratings that meet their ESG goals; event and food and beverage offerings that appeal to clients and employees; facilities that foster strong company culture; and meaningful wellness and lifestyle amenities for employees.
Ultimately, what I believe we’re seeing is the hotelification of Australia’s offices.
It’s why we created Hub’s new flagship site – Hub Martin Place in Sydney – with a high level of luxury that some may not associate with “coworking”. It’s a three-level flexible workspace that features an aperitivo bar designed by architects from Hassell, with food by Sydney’s foodie favourite, Fabbrica, as well as a business lounge with a dedicated lifestyle concierge service to support up to 400 members and their guests. Other details, such as the Endota Spa wellness room and priority access to a Lockeroom Gym membership, are designed to give members the very best experience possible while spending their day at work.
High-quality flexible workspaces are becoming far more than a standalone offering. As part of the shifting demand for office amenities, they’re frequently being integrated as a central requirement in major commercial developments across our cities.
Premium flex space is a new frontier in commercial developments
Landlords are hearing calls from tenants for shared amenities and flexible workspaces that match the high standard of their internal leased office.
And Australia’s best property developers are leaning on hospitality and experience providers that can deliver on the premium service standard now expected of them.
We’ve recently partnered with Charter Hall to deliver their first premium flexible workspace at 555 Collins Street in Melbourne, while also managing three levels of shared building amenities, including the business lounge, meetings and events spaces, and building concierge services.
Major tenants at the building such as Amazon, Aware Super and Allianz Australia are expected to benefit from the additional space, with the option to use it as overflow workspace during peak times. And their partner organisations can take up flexible space in close proximity, with the flexible workspace providing options for small to medium businesses in a premium grade asset that may otherwise not be available to them.
It’s something that’s becoming a core part of our service delivery, with building hospitality partnerships with major developers, owners and managers of office assets across all major capital cities. This extra level of dedicated hospitality-led service management for all tenants of a precinct adds immense value to a building, activates important central spaces and ultimately improves tenant satisfaction.
So, what’s next for property developers?
Property developers need to consider raising the quality of what they’re offering – amazing physical space alone is no longer sufficient. Hospitality-led services and a broad range of amenities are fundamental. Can your offering keep pace with rapidly evolving market demands?
When it comes to providing quality hospitality and amenities, landlords don’t need to go at it alone. There’s a growing market of workplace experience experts who can deliver these to a standard that rises above the rest.
Not only can the hotelification of shared spaces help to retain tenants, it can also be the catalyst to a far more activated, cohesive and attractive workspace proposition. And ultimately, it can put new and existing developments well and truly in the lead in the flight to quality.
John Preece is Hub Australia's chief property officer.
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