Flex office market recovering as people seek versatile work environments

by Millie Costigan
0 comment
flex office

A new report by commercial real estate services company CBRE found that Australia’s flexible office market is showing signs of recovery.

The report ‘Australian Flex Space in the Age of Hybrid Work’ points to growth in the sector following a slow return to the office after the pandemic.

The data highlights that Australia’s flexible office market footprint increased by 2.1 percent in the major east coast markets in the 12 months to June 2023.

Flexible working spaces offer adaptability and convenience. Businesses can scale their operations easily, accommodating fluctuating team sizes and project-based demands. 

Evolving workplaces

Flexible office markets peaked in Australia in mid 2020 just as the pandemic had begun and international borders closed. 

During the pandemic, hybrid working conditions were normalised, and employers have since struggled to get workers to return to the office. These transformations in the way we work have both tenants and landlords reconsidering work environments and what they can offer. 

CBRE’s Australian head of office research Tom Broderick says flexible work environments could promote satisfaction of users.

“Office landlords are strategically embracing the evolving working dynamics by exploring innovative solutions such as flexible office spaces and third spaces within their buildings. This shift is driven by the changing preferences of tenants and the recognition that providing adaptable and versatile work environments can enhance tenant satisfaction, attract new occupants, and ultimately add value to their properties,” he says.

The report highlights that more new office developments in Australia are incorporating some level of flexible space, and larger corporations are often requiring it.

What do occupiers want?

The commute has consistently been named as the key factor preventing employees returning to the office, and the report identifies convenient access to public transport as a key factor sought by employees. 

The survey found that onsite cafe food and beverage, fitness facilities, shared meeting space and sustainable building features are other key considerations of occupiers. On-site amenities were said to encourage social interactions among employees, leading to improved collaboration and a sense of community within the office.

CBRE’s Asia Pacific head of flexible real estate Sidharth Dhawan says evolving workplace dynamics have forced flexible space operators to rethink their offerings to remain relevant in a post-pandemic world.

“These offerings vary by tenure and customisation, ranging from ‘gym pass’-like day memberships on the one end, through to fully turnkey managed spaces on the other,” he says.

“International operators now see Australia as a mature flex market offering growth potential and some are actively looking at opportunities, particularly in prime grade buildings.”

Landlords respond to changing preferences

Landlords have realised the potential to convert underused areas within their buildings into shared workspaces that cater to people seeking collaborative environments.

Opportunities for new revenue streams have emerged through offering flexible lease terms and access to amenities like high speed internet and meeting rooms. The integration of “third spaces”, which encourage relaxation away from the desk, are said to foster a sense of wellbeing, so landlords are transforming defunct spaces like lobbies into inviting zones for people to unwind.

Overall, the report predicts the flex market in Australia will grow over the medium-term.

A recent report from Unispace has found a disconnect between employers and employees when it comes to working conditions.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More