A Shift in Perspectives – What Commercial Property Owners Are About to Experience that Many have Never Before
In rental and lease markets it’s fair to say that for the best part of three decades, the landlords have been the price setters. The rules around negative gearing in domestic supply enable sizeable portfolios. Demand in office spaces in central suburbs has been consistently tight. And now, finally, CFO’s have become aware of the drain on cash that has been the HR Director’s remit – staff office space
Which is now about to change. What has become clearer, prompted via Covid and people ‘forced’ to work from home is that NO, you really DO NOT need that sizeable office space. Instead you need improved management practises that enable people to work from home. And with that practise developed, your office rental bill plummets. Spending on office space is a choice with a direct impact to the bottom line. The long errant assumption that we cannot trust people to work effectively when we cannot stare at the back of their heads (the 1780’s Wedgewood factory model of ‘Overseer’) has been in need of an overhaul since the 1980s.
CBD based CFOs have had a chance, especially in lockdown sites like Melbourne, to wander through cavernous warrens of empty desks and chairs and they have begun to ask, ‘do we really need ALL THIS SPACE?’ Clearly, no you don’t. Employees, no longer forced into driving hours each day or wading through public transport turnstiles, are demanding to stay home. En Masse the shift has occured is going to see less than half the required CBD space despite some people calling for a return back to ‘normal’.
Already businesses are seeing the advantages in smaller sites in non CBD or inner suburb locations. Frankly, as has ALWAYS been the case, Work from home, WORKS! The old ‘normal’ is dysfunctional and the unwillingness or inability of HR Directors to set the tone in upskilling middle management is a core problem.
I’ve been looking for a second office interstate and have just come from a week traveling around looking at potential sites. They key criteria was ‘lifestyle’ – is this a place where employees would like to live. NOT ‘is this where I want my office to be?’ The location is based on employee needs. If they’re likely to be happy to live nearby and come in to an office occasionally, that will work for me too. And I can assure you, that the offers from agents are very fleixble indeed with a much more favourable offers likely in the next few months as larger businesses determine that they really do not need to have their staff in the CBD area full time all the time. And if that means smaller offices (it does) it also means non CBD appeal increases.
Many Landlords in Commercial Property are about to experience what it is like to be a Price TAKER. For many, that won’t taste quite so sweet. But for local cafes, shops and other locations out in the suburbs, demand will increase. Arguably what is happening is a shift from the high pool of money centralised in CBD environments and a sharing out to the suburbs. The question for Commercial Property Managers now is ‘what do we do with the vacated space? If they hold off for price increases, they’ll have empty stock sitting on their books for years. Or do they shrink supply by taking some office space off the books through conversion into residential or other uses? There’s much to consider in this sector though one thing is clear, the workforce is not coming back the way it used to
I flag my bias towards the need for a vastly improved approach to managing staff in the work environments. V A S T L Y improved. I’m still surprised at how clunky, disorganised or naive some senior managers are when it comes to that part of the business that considers ‘people’. And rather than cover…Read More >
An interesting public workshop in Perth in the first week of October introducing a varied group to the Organisational Evolution model. The Org-Ev is the model I developed for the start up of The Australian Strategic Planning Institute in conjunction with Steven Bowman. Given the diversity of the group, there were a number of surprises…Read More >
A note for those of you in Perth that there are just 4 spaces left for the Introduction to the Organisational Evolution Model workshop at Adina Apartments in Perth. The Org Ev model has been designed to enhance Strategic Planning and decision making and this introductory workshop is aimed at those looking to attend the…Read More >
Later this month I’ll be facilitating a scenario session looking at the potential impact of a long standing heatwave event for the City of Greater Dandenong here in Australia. Heatwaves kill more people than any other weather event. By a long way. Importantly they also have a ‘fat tail’ with physical impairments to individuals often…Read More >
Looking Up Feeling Good will be running an workshop on the Organisational Evolution Model in Perth. The Org-Ev model has been used by a wide number of agencies across almost all industry sectors, and was originally developed for the Australian Strategic Planning Institute. The workshop is limited to 25 people and will take place at…Read More >
If you’re involved with setting policy, allocating funding, designing products or services and delivering on them, then one book you simply must have read is the absolutely astounding ‘Invisible Women’ by Caroline Criado Perez. What Perez has done with this book is ALL OF THE RESEARCH you need to have available to you when you…Read More >
Are we there yet? Have people finally cottoned on to the idea that maybe, things aren’t going so well for the planet and our place in it? Storms, up; floods, up; fires, up; droughts, up; people being displaced by climate events, up. The signals are all around us. And yet, as a species we struggle…Read More >
One of the most challenges aspects for owners of businesses, and also for Boards charged with running businesses, is how to allow for the impact of a decision to unfold over time. Many listed company Boards will be delaying with a CEO on a limited tenure. The Board will have set expectations for performance and…Read More >
Local Governments in Australia face an emerging risk space that many seem unaware of. Brought on by rising costs, especially in business premises rentals, compliance needs and registration costs, research we’ve identified as part of work with a Local Government client is indicating a significant increase in businesses popping up in residential areas. What seems…Read More >