BVN Stories — November 3, 2021

The Great Experiment: how the workplace is evolving in post-pandemic Australia

Much is being reported about the “great resignation” as the most pressing threat to businesses as we exit pandemic lockdowns. It’s been the biggest global work-from-home pilot, and many are questioning the relevance of CBD workplaces. This includes new talent who are now looking specifically for location-agnostic opportunities where they have broader lifestyle choices and career development. But this isn’t the only threat.

All this change is forcing a complete re-think of what a workplace should look like. Belonging and connection to organisational culture now defines a good employer. And, a desirable workplace. But are businesses and building owners ready to evolve?

The good news is that this unexpected experiment in remote working has opened up a world of possibilities. Building owners now have a great opportunity to create new ecosystems for and with their business tenants who are looking to create memorable experiences for their people.

Those landlords hoping for things to return to the way they were, may not retain or attract future tenants. The big incentives paid to tenants in the Australian market may no longer do the heavy lifting in securing new tenants. Businesses want office space that gives them opportunities for relationship building, and activities that align their people to their values. Placemaking and community building is fundamental to employers, and thus to real estate portfolios, harnessing the opportunity to create “sticky” buildings and loyal networks.

The CBD workplace is not dead it just needs to work harder to provide experiences that can’t be had by working from home, in order to ‘earn the commute’ - a catch cry coined recently.

The appeal of the office will be varied of course, but for many, it will be about social interaction, face to face collaboration and team building. And not for individual focused work in singular individual desk-based workspaces as we’ve traditionally seen.

The often touted “office as clubhouse” model will be the future direction for many tenants. This could mean rationalisations of underutilised CBD space in the order of over 50% in future tenant requirements. Space will have to work harder.

The huge growth of the co-working and flexible leasing market prior to the pandemic can give an insight into the “space as a service” model, underpinned by high-quality technology and hospitality, for future community building. The old set-and-forget approach to fit-outs aligned with 5-10 year leases will no longer serve organisations and businesses that have learnt the importance of agility and changing market conditions.

The world of bricks-and-mortar real estate will be replaced with an install-not-construct methodology where a fit-out remains live for the duration of the lease and is constantly recalibrated to the needs of the organisation. We will see fit-outs treated like software, constantly being curated, where updates are simply pushed through - like updates on our iPhones - to stay relevant and effective. A fit-out may become part of the new leasing model rather than an upfront capital expense, able to respond to up-to-the-minute usage data to optimise the user experience.

At the core of this new changing market is the fundamental shift to our collective responsibility to save our planet and minimise waste. Redundancy and underutilisation can no longer be carried by tenants as decisions are made about building sustainable businesses rather than traditional workplaces.

We need to expect new demands of organisations that revolve around wellness for their people, the quality of the air they will be breathing and access to outdoor space as part of the new office offering. Services, hospitality, diverse and dynamic retail and food precincts will draw people back to the CBD. Large gathering spaces can be shared by a community. And it does matter that your neighbours have aligned values. Innovation, connection and differentiation are now key business and employment drivers.

The post-pandemic world is exciting, the opportunity is huge and now is the time to be courageous.