Flexibility Works
On Monday 17th November, the Sydney CBD was the quietest I have seen for ages. I thought it was just me. But the next day as I was having my haircut, I shared my observation with my barber, and he said his numbers were down X% on that particular day. So it wasn’t just me. It was proof that flexible working works.
Flexible working depends on many things; size of entity, location, quality of office, age of employees, type of business, years in business, age of executives and so on and so forth. There are so many variants. Every organisation is unique. It even depends on whether a tenant gets advice and if so, from whom.
We have not yet found a single dataset that provides a real picture of office space utilisation rates industry-wide; that is for millions of tenants. There are datasets that touch on the subject, but they are focused on a handful of major global corporate occupiers. Most of that does not reflect what is happening here with normal tenants. In fact, some of that data shows return to office is on the rise. If that’s the case, absorption figures would be different to what they are?
Because there is no universal data set for office space utilisation, here is a chart representing what we believe office space utilisation rates are based on size of tenancy in the Sydney CBD. Again, each organisation is different and there are exceptions to every rule. Our aim is to show a minimum, maximum and 100% utilisation rate based on rounded size of tenant.
Finding 1. The bigger the tenant, the smaller the utilisation. We all know that
Finding 2. 2019 research supported by the industry showed utilisation rates in better quality properties was 75% – our view at that time it was a range of 70-80%. Based on our findings, it means not much has changed except that tenants are not taking that extra space they used to.
Finding 3. Our broader findings are Canberra has the most flexible working, followed by Melbourne and then Sydney. Perth, Brisbane and Adelaide are similar with less flex. That is not because they are less flexible but because they have more smaller tenants.
What happened on the 17th? I’ll just chalk it down to being all quiet on the office front.
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