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Posh office space the new weapon as businesses wage war for talent

Business

A flood of new office space has blown out Brisbane’s vacancy levels as the property sector banks on a return to the city next week when the Government’s “stay at home” recommendation comes to an end.

 

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The Property Council said the vacancy increase from 13.6 per cent in July to 15.4 per cent in December was impacted by the release of new supply of about 60,000 square metres, much of it relating to Suncorp’s new premises.

That appears to be an issue for the sector for the rest of the year with another 44,000 square metres of space coming on to the market in 2022.

Office occupancy remains an issue because of the growth in work-from-home. Google mobility data shows that visits to the workplace in the Brisbane CBD were down 14 per cent in January compared with the baseline of January 2020. Visits to retail locations were down 9 per cent while the real problem appears to be public transport, which was down 45 per cent.

The council’s Queensland executive director Jen Williams said there was a strong resilience in the market and she believed that people would return to the office in coming weeks because they craved the connection and productivity that the office provided.

But there has also been a flight to quality with the premium end of the market showing a reduction in vacancy levels. Williams said this was because business was waging a war for talent which meant they were seeking out office space that provided benefits for staff.

“Business is looking to the longer term and the office is the home of their business,” Williams said.

“In the war for talent that is going on people are seeing a beautiful office is a point of difference. Even when people are coming back for fewer days a week they want nicer spaces and bigger spaces and so business is holding on to more space and even expanding as the war for talent accelerates.

“I think people will come back. The way we work has fundamentally changed and we are not going to see 100 per cent of people back 100 per cent of time, but people do miss that connection with one another and the productivity benefits and they enjoyed being in the city.

“There are some barriers (to them returning), the high number of cases and we know public transport has been an issue throughout the pandemic with people worried about health concerns and the cost being prohibitive.”

She said overall demand was still positive.

“These results are remarkable when you consider that out office market is facing some of the most volatile conditions in our history due to Covid-19 and the growth of the hybrid working model.

“The latest data shows that businesses are clearly betting big on the future of the office and understand the value of having a permanent base where workers can connect with one another.”

 

 

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