- Tenant size is a major predictor of whether occupiers are going to expand or contract space
- Sub-1,000 sqm tenants grew their footprint by an average of 20.4%
- Larger tenants of 3,000 sqm contracted by 12.6%
The way small and large occupiers are addressing their office requirements in a post-pandemic world is clearly different, according to new CBRE research.
The Office Footprints report shows that tenant size is a major predictor of whether occupiers are going to expand or contract when making a leasing decision.
Tom Broderick, CBRE Head of Office Research, said an analysis of national office leasing deal from Q1 2021 to Q2 2022 showed that sub-1,000 sqm tenants grew their footprint by an average of 20.4%.
1,000 sqm to 3,000 sqm tenants expanded by an average of 11%.
By contrast, larger tenants of 3,000 sqm contracted by 12.6%.
“Smaller businesses have typically grown their headcount over the past few years and are also wanting more collaboration space and smaller meeting rooms within their offices,” Mr Broderick said.
“In contrast, larger corporates have typically been slower to return to the office and are seeing opportunities to cut costs by reducing their footprint as they increase desk sharing ratios.”
Although CBRE’s report highlights a clear focus by larger occupies on increasing office occupancy levels, uncertainty remains in regards to floor space needs.
“The overwhelming response from larger organisations is that they want to improve occupancy levels in their offices to drive collaboration, build culture and ensure that younger team members are receiving the mentoring they need to advance in their roles,” said Darren Nugent, Director of CBRE’s Pacific Office Occupier business..
“However, set against this is the fear of losing staff who prefer to work remotely, and many occupiers remain unsure about their future office requirements.”
Darren Nugent, CBRE
Aside from size differences, the CBRE report found that leasing activity overall has been on the rise across Australia. Leasing decisions in H1 2022 doubled compared to the same period in 2021, factoring in both renewals and relocations.
Additionally, around 68% of leasing decisions in H1 involved tenants maintaining or expanding their footprint.
