Kathryn House
Hello, and welcome to Talking Property with CBRE. I'm Kathryn House, your podcast host, and in this latest episode, we'll be exploring the office evolution. How can we future-proof office buildings and give workers a better guest experience so that they want to come into the office. In essence, what some people are calling the hotelisation of offices? And what other tactics can landlords employ to foster the workplace experience such as providing greater flexibility to enhance occupier engagement, property values, and truly earn the commute. To get under the hood, I'm joined by Jaelle Ang, the CEO and founder of The Great Room by Industrious, a flexible workspace provider that serves a roster of Fortune 1000 enterprises, start-ups, industry thought leaders, and change-makers. I'm also joined by CBRE's Executive Managing Director of Property Management in the Pacific, Nat Slessor. So, I thought maybe to open the conversation, people talk about co-working. They talk about flex space. In Australia, we talk about third space. And it's all related and intertwined but means different things to different people. Perhaps Jaelle, maybe I could start with you. Could you quickly talk us through some of the differences? And I'd love to get your take on it also, Nat.
Jaelle Ang
Often in the industry, co-working and flex space are used interchangeably. There are subtle distinctions. Usually when people talk about co-working, it connotes community, networking, shared resources, making it very easy to find like-minded people in a supportive environment. Flex space prioritises flexibility, scalability, catering to a bit of a larger enterprise with fluctuating space requirements. But my thinking is that really all of this is just going to be called working, because that's simply how people want to work. They want the people, they want the freedom to choose how, when, where, and who to work with.
Kathryn House
So Nat, this all fits under the umbrella of our Experience team at CBRE. Perhaps give us your take on how you define co-working versus flex space and third space.
Nat Slessor
Flex space and co-working, I can't agree more, definitely comes under the similar category as Jaelle just explained. Deliberate decisions by teams and businesses and project teams to collect in a space that gives them a level of service that they really need as a start-up or a small team for a short amount of time, maybe six, 12, 18 months, maybe a little longer in some great cases. Third space is a slightly different kettle of fish. It's the spaces in between, if you like, the spaces in between, potentially more traditional office space, the co-working, maybe the spaces in between retail and office spaces. Think of your office lobby. Think of all the spaces that are not quite an office, but you might work in them, a lounge space, some meeting rooms that you may hire, or you may just be able to use. I think there's immense potential in third space. It's the fabric of our cities in many cases, and the fabric of our office buildings. So slightly different to flex space, which might be a bit more of a leased or procured space, third space is that bit in between.
Jaelle Ang
That's a very interesting note because one of the things that we've realised growing across APAC is also how intentional Australian landlords are about the third space. They may define it differently. It could be an amenity, a lounge base. It's where people work, play, connect, collaborate, eat, drink, socialise, all of that. But, it's become a very important part of the work-life journey, because it isn't really about being behind the computer anymore. It's all that time, that here's why you're going into the office. And creating that third space is so intentional. I think compared to the other landlords and the other cities, Australian landlords are very intentional and creating very beautiful third spaces, working with different partners to be able to achieve that to future-proof their buildings.
Kathryn House
So Jaelle, you've had a good opportunity to investigate the Australian market. You've only recently opened your first Great Room here in Sydney. What brought you to Australia? There's obviously been a lot of media focus on the co-working sector, particularly in light of recent events with WeWork. So why do you think there are so many opportunities here?
Jaelle Ang
The decision to expand The Great Room to Australia was driven by our belief in the immense potential of the Australian market. Australia boasts a very vibrant business landscape, a wonderful, energetic entrepreneurial spirit, a strong appetite for very innovative workspaces. There's been flex work operators operating on Australia for quite a while, but our goal is to bring our unique blend of hospitality, wellness, and a high-performance, well-designed workspace to Sydney, starting with Sydney's 85 Castlereagh Street location. I think Australia's focus on sustainability and wellness also aligns perfectly with The Great Room. It's really our core value and makes it a very natural fit for expansion. We see that with the many flexible workspace operators in Sydney, there's real segmentation starting to happen, and there's really something, a different brand, a different kind of arrangement for different type of enterprises, and it's a great market for us to see ourselves starting and then expanding in.
Kathryn House
I'd love to maybe take a step back and find out from you, Jaelle, how did you get into co-working in the first place? When I was looking at your background, really interesting. You trained as an architect, worked in banking. What brought you to co-working?
Jaelle Ang
They say it only makes sense when you look at the rear-view mirror. I don't think when I was a student or in college, I imagined this is what I'd be doing. Since I was 12, I wanted to be an architect. So like you say, my background's in architecture. I love design. But quite quickly, I realised that my superpower, if you may, isn't being the best designer. I'm a great advocate and a great enabler for great design. I'm able to marry the commercial and the design part. So, if you think about it, co-working, it's actually a great umbrella career for me. It brings together quite a few of my passions. It's got that commercial real estate. It's got that finance background, and I used to be an M&A banker for a couple of years as well. It's got design. It's about people. It's about business. So, it allows my curiosity to flourish. Then when I started one, the first one in Singapore at One George Street, I didn't realise that the industry was going to grow so quickly. Five, six years into it, people call us the pioneers, which I'm like, "What? We've only been in the business for five years." But it's been an incredible journey. We are also in Bangkok and Hong Kong. These are all great, wonderful cities in Asia-Pacific, and Sydney, it's the new exciting place for us.
Kathryn House
So Nat, you've also had an interesting career journey. You actually studied psychology at university, I believe, and I've heard you speak about how this has really dovetailed with your approach to the built environment and experience services.
Nat Slessor
Yes, that's absolutely right. I resisted being in property, if I'm totally honest, as my father was in property. I did that classic thing where you went, "I'm going to do something completely different." And I went to study psychology at university as you mentioned, and that evolved into a passion for environmental psychology. And if you don't know what that is, it is effectively the influence that the design of our built environment has on people. I've said this before for those who've heard me speak, but if you could design a hospital that healed you quicker by its very design, you would do that. So, some features of the design made you get out quicker, you would do it. Same with a school, how might we create a place that helps children learn or feel safe? Or communities, communal experiences. So really that's been my passion. How do we influence the human outcomes with what I call the wrapping paper of life, which is property. Inside the commercial space, what's it for? What's the office really for? What's the workplace in the city for? It's to help businesses thrive and connect for growth to happen, for careers to flourish, and for really genuinely people to feel like they're part of something bigger. The actual design itself was where I spent a lot of my career and now expanding that into how do we manage those spaces? How do we create experiences in what's already been designed and built that continue to add value. So, it's been a continuum for me. I still say to my father who's retired from property now that "I'm not in property, I'm still in people," and let's hope that's always true.
Kathryn House
Yes, and I love the wrapping paper of life. I might have to steal that! I also really love the different path ways from which people come into their roles, which gives you that really rich background. And the whole idea of partnership is something that has changed in the co-working sector. So Jaelle, I'd love to get your thoughts on it. I think it really has evolved post the pandemic and post some of the consolidation that we've seen in the sector. Can you talk us through the discussions you are having with landlords and what feedback you're getting in relation to co-working?
Jaelle Ang
Well, the traditional lease model, it's been rapidly evolving. The Great Room has been pushing this boundary together with Industrious in the US as well. Our landlord partnership model represents a very intentional shift from the conventional lease arrangements of the past where it's much more of a zero-sum game of us paying a fixed rent whatever happens. And by collaborating with the landlord, our intention is to create a mutually beneficial arrangement that mitigates the lease liability risk for both parties. So, this approach is not all that innovative. The hotel industry has been using management contracts, version of revenue share models to great success all this while. For the flexible workspace operator, what it does is it safeguards our balances sheet but it also fosters stronger and more sustainable relationships more, what I call long-term greedy relationships with property owners. By being long-term greedy, you smooth out the ups and downs. You invest in placemaking. May sometimes not yield immediate kind of returns, but over the long- term, value of the asset creates huge value for both operator as well as the landlord. And I guess in the aftermath of WeWork's challenges, the industry has learned very valuable lessons about the importance of transparency, flexibility, prudent risk management, working together in a much more open and transparent way. And the rise of these landlord partnership models, which takes both operators like ourselves, our peers, as well as landlord openness, reflects this tone of new-found emphasis on stability and mutual benefit.
Kathryn House
So what potential do you see in Australia, Jaelle? How many facilities would you like to open here?
Jaelle Ang
We obviously have grand ambitions. We don't go into a city unless we can see that we will be growing for quite a while. There's nothing set in stone. It's really about growing with the direction of the Australian businesses and also meeting of minds with the landlord. To be honest, Australia landlords are still conservative, but like all landlords in APAC, they want to have it all. They want to have the rent. They want to have the upside. We want to make sure we're creating the right third space. We want the best operator. And I always say the best operator for the right asset as well, it's both right. So I think it really depends on all those factors coming in. We're very focused on finding partners, and we mean that in a philosophical way because you need the right partner to create the right environment and getting the kind of members and tenants to the building. But at the same time, the partnership is also in that liability and economic benefit that we both share. So, if we're very focused about that, then it takes time. We like to grow, but I call it a string of pearls. We are going to grow very intentionally. Every single location that we add onto our string of pearls will matter and will have to stand on its own as a great destination, a great workspace, and economically sustainably.
Kathryn House
So Nat, are you saying that there's now more of a partnership approach when landlords look at how they engage with occupiers to provide that better workplace experience?
Nat Slessor
Oh, absolutely. I think partnership is the watchword over the last period, to be honest with you. It is a lot less transactional. I think though it was a power imbalance between landlords and occupiers in the past that's completely been broken and thank goodness for that. And we can get to the point where at the end of the day, you can't invest in an empty building. These buildings need to be full and vibrant, and that to know what to do and how to design the experience is going to be key as part of the product. So you don't buy an Apple iPhone because it's just a pretty piece of glass and titanium. You buy it because of how it operates. It's got the apps that you need. You've been able to customise it for the way that your life is running. So, in some ways, it's not like a hotel. It's much more, there's just a one-hit kind of transaction. It's a little bit more like being part of the occupiers' lives and their businesses. It's a long- term partnership, back to that word again. So, landlords that really understand that are excelling in terms of how they are breeding loyalty with their occupiers, and that at the end of the day creates a sticky tenant and that long- term partnership can thrive.
Kathryn House
And I know a lot more landlords are calling them customers now, not tenants.
Nat Slessor
Yeah, and that's a real acknowledgement that it's a product business in a way. We need to create something that people want. That sounds like the most obvious thing in the world, but the real estate industry has not always thought about it like that, create the products that people are attracted to, they want to buy, and they want to operate in because it's customisable to what they and their people need.
Kathryn House
So, we've talked a little about the landlord here. I'd love to get a view on the types of occupiers that are really embracing this whole flex piece. Nat, could I start with you?
Nat Slessor
Yes. The type of occupiers that are embracing flex is really wide-ranging in our experience. It started with start- ups. That whole sector was getting people out of their mum's garage and the cafe down the road into a place which really supported their growth, but that is not the case anymore. So, from creative organisations to tech to very conventional organisations that are looking for something literally flexible, it says it on the tin, where they can get a great experience as fast as possible so that they're able to mobilise, it's a really wide range. And so, I think it's very much an umbrella term, flex and co-working, and what you thought about it before is probably not what it is now at all.
Kathryn House
Yes, it has changed considerably. So, what are you finding, Jaelle, in terms of the occupiers that have come into the Sydney Great Room so far? Are you seeing any particular trends and are they different to what you're seeing overseas?
Jaelle Ang
When co-working started, people assumed that it was for the cheap and cheerful, and start-up businesses. The Great Room's never positioned that way. We call ourselves co-working for grown-ups. It doesn't matter whether you're actually in a start-up business or a Fortune 1000 business. It's a sudden ambition, that desire to collaborate and to do more. And in Sydney, we realise, it's similar. I think it's also driven by the types of businesses that are in Sydney. So, there's a lot of financial services, there's energy. It's rather mixed, and that's a beautiful thing because it allows that ecosystem to build and that collaboration to happen. And people love learning from field experts. So, I used to say that the office used to be a place that you work for eight hours behind your computer and you have meetings in between, but the role of the office has changed. And because of that, it does attract different types of people. The office now needs to be a container for culture and for identity of companies, especially if they're small businesses as well. It's all the more important. It needs to help companies win the war for talent. If you are a five-man show, who you bring into and that first impression, you get one chance to make a first impression and you've got to make it right to attract the talent that you need to grow your business. More importantly, it's also the modern agora for learning. People need to come to work. Where they get formally trained or informal learning from field experts, they need to learn in the office. As such, there is great synergies and chemistry that I used to think maybe it's just something that people talk about, doesn't really happen, but now I see it on the ground every day, that large companies love that energy and that ownership that entrepreneurs bring. And the entrepreneurs are like, "Oh my God, here I am trying to reinvent the wheel, and this is how the big boys do it." And that lovely chemistry really delivers tangible business value. As such, a lot of unexpected industries have joined. I didn't think that lawyers would be someone that would come to a co-working space because of how open and maybe less privacy than they like. Financial services, we have embassies, we have stock exchanges, very unexpected enterprises have joined. I think what you need to provide for them is they want to have it all. You need to give them the acoustic privacy and different types of workspaces when they want to be open, they want to collaborate, you want reflection, all of that training. It needs to come together. And when given all that, different types of companies can actually be in a co-working space.
Kathryn House
I think that whole learning from other entrepreneurs and that learning that you almost get subliminally when you are in a situation and just overhearing a conversation or having those bump moments, I think we really did miss that during the whole COVID period when we weren't in the office.
Jaelle Ang
Yes. The value that casual collisions generate it's real. The water cooler chat "can you show me how to make coffee with this very complicated machine?" and all those little things add up and sometimes they create the greatest value. The value isn't when you're behind a computer. That's the work we all need to do. But real high value work, it's when you're out and about.
Kathryn House
So Nat, flex has really redefined office buildings and the role they can play. One thing I saw on LinkedIn the other day was at QV1, a building we manage in Perth, on one of the empty office floors in the sky rise, they had a fashion show with some design technology students and they turned the office floor into a fashion runway, which is really unexpected but a fabulous event in terms of bringing the broader community into the office. How do you see this playing out in the office buildings of today?
Nat Slessor
Yes, I absolutely think it's going to be about that wider range of audience and therefore wider range of how we might attract community to our spaces and the spaces that we are lucky enough to look after. We've had graffiti art exhibitions. We've had performance art. The minute you come into the office, what we want this to be is why you would go anywhere else? Because there is that element of surprise and delight as well as those elements of like, "this is just supporting my life and my work that I'm doing today." We all have choices about where we go. We can choose to work at home. We can learn at home. We can shop at home. Why don't we just do everything at home? The reason behind that answer to many people is something unexpected and delightful might happen. I have greater value when I get there. It's a change of scene, I learn something. So, we're really trying to tap into that well.
Jaelle Ang
We've done it a couple of times with the different brands. Look, if people aren't going to the malls and retail as much, what do we do? We bring the mall to them. We bring the brands to them. It's all the brand immersive experience. So, if we can turn, for property owners, if we can turn the eight-hour office day into a 16-hour business model, we can't quite be 24 hours like the hotel, but 16 hours from your first cup of cappuccino to your last nightcap, wouldn't that be interesting?
Nat Slessor
That's it. Ultimately, just laddering up here, what are we trying to achieve is probably the starting point we need to get to first when we're looking at any asset or any place. We're trying to create an experience for people they can't get anywhere else, they can't get at home or maybe in even another asset. So what makes it really interesting for them is to come into the office and have the experiences that they want to talk about somewhere else. And then they're really living like, "this was a great decision to come to the office today." That's our ultimate fantasy feedback.
Kathryn House
Yes, and I really love that term, surprise and delight.
Jaelle Ang
We create quite interesting and curated events, but sometimes it's the small things. So, on Mondays, we have something called a turn down card inspired by a turn down service in hotels. And it depends on the season, we have different cookies. And sometimes we have vote for your best and favourite cookie. We work with local bakeries and stuff. So that delight, and people still talk about that, "Monday turn down cookie is actually my favorite thing all week." When we first came up with it, we thought it was so small, but it's that rose. It's that small cookie. It's that unexpected amusement and delight.
Nat Slessor
Well, you had me at cookie, I'll tell you that for nothing. It's a beautiful way to bring that care and hospitality but that care into the workplace. In Australia, we love that. It's the personal touch. It's food and drink and real sense of service that you may see in hotels, but you see in communities. It's that warmth that you want and that warmth that'll get you back.
Jaelle Ang
Unsurprisingly, Singaporeans and Hong Kongers and Thais also love that. I think it is some things are quite universal, gathering around food, F& B, hospitality, it's something quite universal. And we at The Great Room define hospitality as taking care of people. If you just take away that simple notion of taking care, how can we take care of you today?
Kathryn House
Well, I really am going to have to come in, Jaelle, and see The Great Room. From what I've read about the space, it sounds fabulous. And I'm also really looking forward, Nat, to seeing what's next when it comes to Experience Services because there are obviously some exciting trends that are happening in that space. So ,if you like the show and want to check out more, visit
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