Walk around Melbourne on a Friday or Saturday night and you will see that much has returned to normal as bars are pumping with people and music, restaurants are serving hungry diners and streets are full of life.
As this is happening, many companies expect workers to return to offices.
Earlier this month, the Property Council of Australia released data showing that tenant demand for office space increased across all major capital cities in the six months to January and that net tenant demand exceeded historic averages in all cities except for Sydney and Brisbane.
For employers and commercial landlords, this raises questions about how to encourage workers back into the office.
Such matters were discussed during a recent physical/virtual breakfast briefing held by the Property Council in Sydney.
The session was chaired by Alexa Mahony, Director, Office Leasing at Knight Frank Australia. Panellists included Adrian Harrington, Head of Wholesale Investor Relations and Fund Raising at Charter Hall; Distinguished Professor Lidia Morawska, PHD, Director, International Laboratory for Air Quality and Health and Co-Director – Australia-China Centre for Air Quality Science and Management; Deborah Coakley, Executive General Manager, Funds Management at Dexus and Charlie Peck, Development Director at Brookfield Properties.
Amongst all panelists, there is a sense that people want to return to offices. This is being driven not only by economic growth but also a desire to collaborate and to return to normality.
Having personally gone back in January, Harrington said this has been a “Godsend’ with productivity and connectivity which have been ‘amazing’.
“I do not ever want to have to work from home again,” he declared.
The challenge, panelists said, involved ensuring that returning workers feel safe and helping them to achieve best possible outcomes.
On the first point, Morawska says landlords/commercial tenants should ensure that ventilation systems are operating according to standards and assure office teams that this is in fact happening. She acknowledges that this is more challenging in naturally ventilated spaces in cases where ventilation depends upon opening widows and where conditions outside may be noisy or cold.
Morawska adds that ventilation will evolve moving forward with technology and flexible working arrangements. Rather than constantly operating according to maximum people capacity, systems will be designed to adjust to the number and specific location of people who are present within rooms and deliver air specifically to where people are.
Other panelists agree about the need for safety. Speaking about Brookfield, Peck says the company is looking at ventilation, increasing lifting, suitable ways of working and ensuring distancing along with ongoing developments in technology across its global portfolio. Whilst momentum was already gathering in this area, Peck says this has intensified following COVID.
Coakley broadly agrees. She adds that this plays into a broader trend around wellness and using spaces to maximise efficiency, effectiveness and wellbeing of occupants. Such considerations are being closely monitored when undertaking rebuilds or refurbishments, she says.
Beyond safety, panelists stress the need to better cater for occupant needs.
Peck says one consideration involves amenity not just outside the building but also within tenancies. For its lease of almost 4,000 sqm at Brookfield Place in Sydney, for example, financial services firm Moelis Australia engaged a hospitality consultant to design their front of house and co-working space.
In addition, Peck says specifications and fitouts must allow for more hush rooms, quiet zones, collaboration zones, ‘town halls’ and entertainment spaces. Workers escaping screaming children, he said, have little desire to come into an environment involving large banks of workstations.
Beyond that, Coakley says design will need to flex to ensure that workstations are multi-purpose from a technology viewpoint. From their desks, workers will want to be able to undertake Zoom meetings, share documents, hang up and tell their neighbouring co-workers that the deal has been done. Workstations will also need to cater for a continued hybrid model whereby some are in the office but others are on Microsoft Teams.
All this, Peck says, will drive a greater market spread between premium spaces which can provide these features and lower grade space that may not.
That, Harrington says, points to challenges for smaller landlords.
For larger players such as Dexus, Charter Hall, Brookfield and others, costs associated with safety, wellness and other features are now accepted as necessary to provide the level of service which commercial tenants now expect, Harrington says.
For others who may own only one or two buildings, absorbing capital costs associated with this could be difficult.
Finally, Harrington challenged the industry to embrace opportunity in 2022.
“All the signs are there that 2022 is going to be better than 2021,” he said.
“Let’s bring back the CBDs and let’s hope that we have got a 2022 that is going to be an exciting time for our cities, the people that work in our buildings and the people who work in our industry.”