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Gone may be the days of packing in employees in tight workspaces in the post-pandemic world, as an expert revealed that office spaces are now being priced through “measures that are outside the traditional norm”.
Sarah Hughes, Colliers’ national director for tenant advisory and occupier services, said that while office space is still relevant post-lockdowns, the value of office space has evolved over the pandemic to emphasise employee experience over headcount-to-space ratios.
“In 2019, financial considerations for tenants were largely dependent on the cost per seat, which ultimately led businesses to want to maximise the number of seats they could fit in the office,” Ms Hughes said.
The expert reflected on an observed trend among tenants placing increasing focus on other measures, such as headcount-to-space ratios — which are considered as traditional quantifier for office space value.
“[For] example, the cost impact (whether positive or negative) of a building’s ability to help the tenant meet their environmental, social and governance (ESG) commitments,” she stated.
Ms Hughes said that the trend is part of a shift redefining the value of office space for “enhanced employee experience and value alignment”.
In line with this, the expert noted an increasing emphasis on diversity elements, including gender-neutral bathrooms and multipurpose rooms for prayer and breastfeeding, as well as recreational areas and residential/hotel-style fit-outs.
“The office is now much more than a tool to facilitate work — it is now a place you go to undertake tasks that you cannot complete from your home (office) whilst enabling collaboration and connection and providing a sense of belonging that ultimately fosters a positive culture, in an era of varied working styles,” she explained.
Colliers national director of office leasing Cameron Williams said that even major companies renowned for being at the forefront of flexible/hybrid employee work arrangements are investing in new office space to boost their employee value proposition.
Particularly, he noted that companies are moving into buildings with the latest ESG features and support their respective commitments to provide their workforce with top-notch spaces.
But it’s not just hybrid set-ups that are changing how the value of office space is defined.
Adam Howard, Colliers’ national director for project leaders, noted that industries such as tech and media — which are renowned for endorsing dynamic working styles that can impact office headcount — are also upgrading their offices, undertaking fit-outs since 2019 to attract and retain employees.
“In recent years, we have facilitated fit-outs for major tech and media offices, ranging from 11,000 to 22,000 square metres, which include features such as an additional 5 to 10 per cent dedicated recreational/dual-purpose space and an increasing number of smaller rooms for digital meetings,” Mr Howard said.
He noted that tech giants are taking steps to create a “residential or hotel” ambience in their workspaces, with a heightened focus on vibrant and biophilic design underpinning inviting spaces for people to feel comfortable in their workspaces.
The experts also underlined that the flight to quality is being observed across all industries, evidenced by upgrades to A-grade and prime-grade office space.
“The cost of relocation means that occupiers are preferring spaces that are already fitted out with modern and inclusive features that optimise the employee experience, whilst providing flexible workspaces with dual purposes, catering for fluctuating headcount.
“Some of our clients even have ESG goals tied to their bonuses, which really reinforces how seriously businesses are treating their commitments, and a general shift in business drivers as it relates to real estate decisions,” Ms Hughes said.
The expert noted that landlords are proving quick to respond to new occupier priorities by reshaping their offices to be competitive in the post-pandemic world of work.
“From a personal perspective, as someone who balances co-parenting with a leadership role, I appreciate using the office in a flexible way to enable myself and my team to be our best selves and undertake our best work,” she opined.
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