September 30 2019

Moving with the times: The changing face of commercial real estate

Times are changing and so is the way we work. As employers embrace a modern approach to the nine to five, their expectations for workspaces have also altered considerably.

The increased demand for a workspace that meets not only the functionality requirements of an office, but recognises the new expectations of the modern market, poses a new hurdle for agents looking to lock in tenants.

All about the amenities

Savills’ Liz Braithwaite says tenants are now seeking a space where they have everything at their fingertips.

“They’re wanting a commercial building similar to a hotel, in that they have everything in the building so their staff don’t have to leave.”

Among the growing lists of requests is concierge services, health and fitness amenities and cafés on their doorstep.

“They’re probably paying for them through outgoings but in the tenant’s eyes they’re getting all of these extra amenities for free. They’re seeing it as getting bang for their buck,” says Braithwaite.

“I believe if there were two buildings, exactly the same, but one offered a concierge service, tenants would pay more for that, because they know they’ll be able to retain staff and poach younger members of the workforce.”

Co-working and flexible leases

Along with a higher demand for amenities, agile workstations are becoming the new norm for high-earning companies.

JLL’s recent report of top trends for tenants in 2019, found larger companies are already locating a third of their total real estate to flexible space, a figure which could climb as high as 45% by 2020.

Braithwaite says she’s seen an uptake in co-working commercial space in areas like Parramatta and Wollongong, as CBD based companies attempt to lure locals with a shorter commute.

While these firms are taking up more space, they’re not signing on to customary long leases, instead they’re seeking flexible term options.

This is “not only for the flexibility of their staff, but the flexibility of their business and their balance sheet at the end of the day.”

Other luring factors

Braithwaite identified a series of other wants and needs, including:

  • Inbuilt tech facilities
  • Adequate cabling and connection points
  • Fast internet
  • Third spaces, including a range of meeting rooms and ‘chill’ out areas
  • Proximity to public transport

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