What’s going to happen to office space?
With large numbers of employees sent home to work over the past eight months, this has had a domino effect on a number of industries. One of the hardest hit has been commercial real estate.
Property Council of Australia research, for example, found there was an increase in Sydney CBD office vacancy rates from 3.9 per cent to 5.6 per cent from January 2020 to July 2020. And as early as April this year, 42 per cent of office real estate requirements in Sydney were on hold.
Employees are working from home while businesses are cost-cutting and analysing their office space utilisation. Businesses, the property sector and architects are all putting their heads together to figure out potential solutions to these challenges. One suggestion, for example, has been to convert office buildings in Australian CBDs into residential living spaces.
“Large corporations and companies – they’re never going to let go of an office or headquarters completely – but they may need less space, and commercial real estate will need to be more flexible with that,” says Durakovic.
“We have already seen seismic shifts towards Space as a Service (SPaaS) models as a result of the gig economy with increased demands for lease flexibility and better alignment between workspace and contemporary ways of working. They’re now going to have to get even more creative with how they can multi-purpose certain areas of buildings, be more flexible in the leasing terms and costs to make that work for them financially.”
“Utilising technology and public-facing spaces to advantage and social good, building owners and organisations have an opportunity to amplify the experiences they can offer workers and the community more broadly, particularly outside of typical office hours,” says Durakovic. She observed that the pandemic has “roused our sense of collective purpose”, citing Herbert Smith Freehills research which has found that people are holding companies accountable to creating value for the communities that they serve and broader global context.
Other research into the employee experience has found that people want to be proud of the company they work for, and Durakovic points out that this requires an alignment of both core values and sense of purpose in their work.