Article | Evolving Workforces

What now for occupiers in the ‘return to office’?

On the back of lower occupancy rates through winter, there’s a lot to play out for office occupiers over the next 12 months.

September 5, 2022

By Andrew Peak


Between COVID, a flu season, transport strikes, international travel and poor weather, the momentum around office occupancy has been sapped this winter. 

Having steadily built to around 50%-60% earlier this year, we’re talking to companies in Sydney and Melbourne reporting occupancy figures as low as 30%-40% in recent months.  

We’re still yet to really have a solid run at the ‘return to the office’. Occupancy is set to rise as we enter warmer months, but there’s a lot to play out over the next 12 months.  

For occupiers setting policies and trying to ensure their workplace earns the commute, it’s a challenge. But it’s also an opportunity in a hotly-contested talent market. 

One of my clients in Melbourne has downsized its footprint and implemented a ‘work from anywhere’ company policy. 

With that, they’re picking up a lot of staff from firms that are probably trying to be more prescriptive in getting people into the office, whether through documented policy or leaders verbally outlining expectations. 

There’s no one-size-fits-all approach; some people would leave a company if they had to work from home all the time, especially if they live alone or in an apartment. 

The way people work has changed and for many employers, as recent occupancy figures suggest, there’s an ongoing challenge to get employees into the office, even two or three days a week. 

Companies can’t force people to come in, and we’re aware of companies that have a three-days-a-week office policy that’s being ignored by some.
Those with prescriptive policies – even based on employee surveys – have found it hard to generate buy-in and are most likely to lose people who are looking for more flexibility.  

It’s also clear that gimmicks like free lunches and coffees are no longer enough, and companies have to look at other avenues to encourage people into the office.

It’s about understanding that the office has evolved and making it a place people want to be, with a better working environment and access to top-line amenities.

There’s a push to give buildings more of a community feel, and we’ve already seen a clear flight to quality over the past 12 to 18 months.  

Landlords are now developing third spaces like wellness facilities and gyms, to give occupants easy access to more amenities; amenities that add value to an employees’ commute.   

The office isn’t just desks these days. We’re moving away from that old school ‘one workstation per 10sqm’ mindset and seeing meeting and collaboration space account for up to 30%-40% of floorspace.  

While in-office technology has to catch up, emerging apps, like those showing who’s going to be in the office when and where they’re going to sit, will aid that collaboration piece.  

Some companies are rationalising their workspace, and making decisions based on creating the best environment for their staff moving forward, rather than cutting costs.  

They’re asking about air quality and circulation, and looking for 95% fresh air. These sorts of things weren’t discussed two years ago but are now at the top of wish lists.  

There’s also a real opportunity for companies to upgrade in this market, given the opportunity to capitalise on landlord-funded fitouts amid high vacancy rates, rather than staying put and risking getting left behind.  

By the time you throw the restart of immigration and managing the blurring of lines from the traditional ‘9 to 5’ structure, there’s a lot to keep an eye on over the coming 12 months.