Office - Workplace -
Office leasing activity across Bayleys’ nationwide network remains active as the return-to-office generates widespread momentum.
We’re seeing lower vacancy levels for higher quality and better located space with strong transport connections, good levels of amenity, and sustainability credentials, along with well-positioned smaller turnkey office suites and flex offices that give smaller firms better quality space.
Bayleys’ global real estate partner Knight Frank’s (Y)OUR SPACE - Future of workplace survey found, 55 percent of office businesses surveyed said they plan to increase the floor space they occupy in the next three years and indicating that physical office space supports talent attraction and retention, increased collaboration, corporate brand and image, employment well-being and ESG.
Overall office vacancy is around 10 percent in Auckland central, with most for sub-200sqm stock.
Matt Lamb, Bayleys national director commercial leasing says many companies are still trying to strike a viable balance between the centralised office and remote working options with attraction/retention of staff driving space decisions, and employee health and well-being top of mind.
“They want healthy and comfortable office environments to enhance productivity, engagement, and employee satisfaction – think natural light, open green spaces, fitness and end-of-trip facilities, ergonomic furniture, and wellness programmes.”
Along with compelling flagship head offices with robust technology capability, advanced security systems, and smart and sustainable/green building credentials – larger occupiers are also embracing satellite hub and spoke solutions to build flexibility into the workplace equation for a more distributed workforce.
Noting that corporates like Beca, Spark and Visa have recently committed to new high-quality spaces in Auckland’s CBD, Lamb ponders whether news that a large city fringe occupier is actively looking to relocate to the CBD, driven to improve staff amenities, and enhance accessibility to public transport, signals the beginning of a trend.
With overall office vacancy of 6.7 percent in central Wellington, Bayleys Wellington office leasing specialist Luke Frecklington says most tenants are trying to gauge actual space needs well-ahead of lease expiry.
“Professional space planners can help clarify workplace strategies so tenants are better informed to make decisions and I see proactive spatial planning as a trend in the current market.”
Frecklington says with CBD office space largely underpinned by government occupiers and election day looming, the slight slowdown in recent leasing activity is understandable.
“However, some government agencies have taken suburban satellite space for business resilience in the event of a significant natural disaster, and/or to accommodate a distributed workforce.”
Other Wellington space trends noted are tech sector downsizing, increased uptake from cybersecurity firms, adaptive reuse of existing fitouts to reduce costs, some landlords taking on fitout amortisation to get deals done, and occupiers condensing to one floorplate for efficiencies.
William Wallace, Bayleys general manager South Island commercial and industrial says in Christchurch, office occupiers have a growing preference for a return to the physical office.
“While remote work proved successful when necessitated, most businesses see face-to-face interaction as core to creativity, innovation, productivity and team cohesion.”
Wallace believes any slowdown of the Christchurch office market as a result of pandemic fundamentals was softer than for many other regions in New Zealand, with Canterbury’s economic stability meaning the city has remained an attractive destination for business and investors.
“Competition for prime grade office space is intense, further driving up the demand and making it challenging for businesses to find suitable options within the city”.