A new report by Knight Frank has revealed that creating an appealing in-office culture is the antidote to low attendance.
Knight Frank’s report, (Y)our Space – Australia and New Zealand report Q1 2025, which focused on Australian and New Zealand occupiers, found more than half of Australian occupiers have issued a return to office mandate and that creating an appealing in-office culture is the antidote to low attendance.
The report also revealed 46 percent of respondents vow to maintain stable average office occupancy rates and 42 percent of respondents intended to increase rates.
Knight Frank partner and national head of occupier strategy and solutions for Australia Neil Murray says office culture and corporate real estate strategy is still plateauing after a pandemic-induced evolution.
“Nearly 40 percent of respondents said COVID had a lasting disruption to their corporate real estate strategy, which is still being shaped by a mix of return to office mandates and flexible working agreements,” he says.
Challenges in delivering exciting and cost-effective amenities
Murray says an insight from the report is the need for employers to enhance and elevate the workplace experience.
“Improving building quality and amenities is crucial for enticing employees back to the office,” he says. “Hybrid work models have led to a reevaluation of office design, emphasising flexible, collaborative and productivity-enhancing environments.”
Knight Frank chief economist Ben Burston acknowledges the difficulty of balancing rich office experiences with value for the investment outlay.
“Occupiers expect to see overall occupancy numbers continue to tick up, which will continue to ramp up expectations of the quality of the workplace experience,” he says.
Burston says respondents who cited cost pressure as second on the list of strategic priorities can be attributed to the burgeoning cost-of-living crisis and ‘sluggish’ economy.
“Corporates are wary of the potential for subdued growth and political uncertainty to drag on near term profitability and make decision making more difficult,” he says.
Staunch desire to work in energy-efficient and resilient buildings
Sustainability was also a key focus in the report, with 95 percent of respondents stating sustainability considerations will greatly factor into real estate strategy over the next three years.
Additionally, 71 percent of respondents identify a key reward for occupying buildings with sustainability credentials is to achieve environmental, social and governance (ESG) goals.
GBCA praises federal budget’s commitment to built world sustainability, but says more work remains.
