AUSTRALIA – A fund manager foresees that demand for office premises would continue to fall next year, while white-collar employment rates across the country would be sluggish due to the economic downturn, reported realcommercial on Sunday (27 December). According to QIC Global Real Estate, office space take-up is forecasted to drop by 700,000 sq m this year and 300,000 sq m by 2021 as compared to pre-pandemic levels. The downtrend is attributed to the greater prevalence of working from home, or more flexible work arrangements. Still, the fund manager believes that businesses will retain their flagship central offices, while 50 percent of their staff will telecommute 2 days per week after the pandemic has been surmounted. QIC also believes that activity-based working will become more common, as employers shift from the usual arrangement of 1 desk per worker to a more versatile set-up, in which employees can book desks. Meanwhile, major city landlord Investa revealed that a large number of lessees are not sure of how they will utilise their office space given the current situation. As such, the lessor is asking its blue chip tenants about their workplace intentions. David Cannington, Investa’s head of research and strategy, thinks that the long-term net impact of the pandemic is a decline of 10 to 15 percent in office demand, with low grade offices being the most affected. Based on the company’s research, the net number of days spent working from home could increase from around 2 days to 2.5 days. Also, the safe distancing rules and the longer-term shift towards meeting rooms & collaborative space is expected to increase work space ratios by 15 to 20 percent. “We’re also seeing a pendulum shift over the past six months in sentiment towards a return to the office as businesses are questioning the benefits of home-based work and appreciating the advantages of getting staff back to the office,” noted Cannington. Still, Investa forecasts that the net negative impact on office demand would fall at the lower end of projections, rather than a more dismal decline of 20 to 25 percent.

Office Space Demand Expected To Fall Next Year

Office Finder Team

December 29, 2020

Australia

AUSTRALIA – A fund manager foresees that demand for office premises would continue to fall next year, while white-collar employment rates across the country would be sluggish due to the economic downturn, reported realcommercial on Sunday (27 December).

According to QIC Global Real Estate, office space take-up is forecasted to drop by 700,000 sq m this year and 300,000 sq m by 2021 as compared to pre-pandemic levels.

The downtrend is attributed to the greater prevalence of working from home, or more flexible work arrangements. Still, the fund manager believes that businesses will retain their flagship central offices, while 50 percent of their staff will telecommute 2 days per week after the pandemic has been surmounted.

QIC also believes that activity-based working will become more common, as employers shift from the usual arrangement of 1 desk per worker to a more versatile set-up, in which employees can book desks.

Meanwhile, major city landlord Investa revealed that a large number of lessees are not sure of how they will utilise their office space given the current situation. As such, the lessor is asking its blue chip tenants about their workplace intentions.

David Cannington, Investa’s head of research and strategy, thinks that the long-term net impact of the pandemic is a decline of 10 to 15 percent in office demand, with low grade offices being the most affected.

Based on the company’s research, the net number of days spent working from home could increase from around 2 days to 2.5 days. Also, the safe distancing rules and the longer-term shift towards meeting rooms & collaborative space is expected to increase work space ratios by 15 to 20 percent.

“We’re also seeing a pendulum shift over the past six months in sentiment towards a return to the office as businesses are questioning the benefits of home-based work and appreciating the advantages of getting staff back to the office,” noted Cannington.

Still, Investa forecasts that the net negative impact on office demand would fall at the lower end of projections, rather than a more dismal decline of 20 to 25 percent.