- 77% of businesses have paid the same or more when relocating
- CBRE found a 10.4% rise in median face rents
- Design & Engineering workplaces represented 13% of all re-locations
The importance of the office has been up for debate throughout the Covid pandemic, but analysis from CBRE suggests that many employers are now willing to spend more on their workplace.
77% of businesses have paid the same if not more when relocating their Australian CBD offices over the past 18 months according to CBRE.
The premiums have stretched into double figures, with CBRE identifying a 10.4% rise in median face rents on the 138 relocations tracked since 2021.
CBRE’s Head of Research for the Pacific area, Sameer Chopra, said a clear trend has appeared .
“Since office leasing activity started intensifying in early 2021, a clear trend of tenants looking to upgrade their premises has emerged.”
Sameer Chopra, CBRE’s Head of Research – Pacific
“Re-locations allow occupiers to move physically closer to their end customers. It allows them to re-configure workplace design to attract and retain talent and match ESG ambitions with energy and wellness offerings in the new premises.”
Rental Premium of CBD Office relocations 2021/22
Although all businesses across sectors paid relocation premiums over the last 18 months, workplaces in the Finance and Design and Engineering sectors have led the pack.
Design & Engineering workplaces represented 13% of all re-locations but also led the trading up trend. The sector’s typical rent increase sits at around 35%. Among Finance workplaces, trade-up was dominated by Investment and Wealth Advisory firms, rather than Banks and Insurers.
Mr Chopra highlighted that small to medium sized businesses (those which cover up to 5,000sqm) had grown their footprint by circa 7% via renewals and re-locations. This figure was somewhat compensated for by larger businesses taking up less space.
CBRE Pacific Regional Director of Workplace Strategy, Advisory & Transaction Services, Janet Martin, highlighted that the flight to quality is in part a bit to attract employees back to the workplace.
“Our clients are using workplaces as part of a broader remuneration package; a tool to attract and retain staff.”
Janet Martin, CBRE Pacific Regional Director
“A workplace is part of a competitive edge for a company and staff need to want to be in it, not mandated to be in it.
“There needs to be mindful planning, design and utilisation of a workplace with different experiences over the day and the week, and a focus on teams and groups as well as individuals, so the asset is seen and used in a dynamic and variable manner rather than being a static place. This also sweats the asset, so that it works harder,” Ms Martin said.
