Flexibility and efficiency the key office trends

Flexibility and efficiency the key office trends 1536x1040

Office vacancy rates remain at near-record lows, driving up rents and compressing yields

Occupiers are demanding ever-greater levels of flexibility and efficiency from their workspaces, which is creating both challenges and opportunities for companies in the development, engineering, architecture, building and construction sectors.

Colliers International’s Strategic Advisory Director, Chris Farhi, and Office Leasing National Director, Rob Bird, say getting it right is now more important than ever.

“Office vacancy rates remain at near-record lows, driving up rents and compressing yields,” says Farhi.

“Companies that can deliver A-grade or premium office buildings will be best placed to capitalise on this strong demand.”

Farhi says understanding the end user is paramount.

“With the rise of flexible working, many organisations are reducing their overall space requirements, but are demanding better design and better space efficiency to justify higher rents.

“Occupiers are also demanding offices that are adaptable, efficient and able to be reconfigured as required. Flexibility is key here.”

At a minimum, a typical ‘good practice’ specification should include:

  • Finishes and materials appropriate for an A-grade building;
  • Contiguous floor plates of at least 1,000sq m each (ideally larger);
  • Minimum clear floor to ceiling height of 3m, and higher in lobby areas;
  • Minimum columns within the working areas;
  • Maximum daylight to working areas;
  • Occupancy density of 1 per person 10sq m, with larger occupiers often seeking 1 to 8sq m;
  • Temperature control of +/- 1.5C during typical conditions;
  • Ability for services to meet minimum performance criteria during operation;
  • Comprehensive end of trip facilities, including showers and bike storage.

For a ‘best practice’ development of international quality, project delivery teams should also consider:

  • Ability to achieve NABERS NZ and/or New Zealand Green Building Council certification;
  • LED lighting;
  • Electric vehicle chargers (or infrastructure to allow tenant to do this);
  • A coworking operator on-site, which many larger corporates are willing to pay a premium for;
  • A low damage seismic design that not only meets seismic standards, but minimises business disruption following an earthquake.

Bird says most new offices are almost entirely open plan, aside from meeting rooms and break-out spaces.

“Even the legal sector – the last bastion of partitioned offices – is moving towards open plan spaces and large floor plates, due to the efficiency, productivity and collaboration this encourages.

“Law firm Meredith Connell has reported excellent staff outcomes since moving to its open plan office in the Mansons TCLM-developed BDO Centre at Graham Street, Auckland.”

Bird says in place of traditional partitioned spaces, there is increasing use of modular furniture solutions such as soundproof pods for meetings or phone calls.

“These modular solutions typically have built-in air conditioning, lighting and power points for devices, reducing the need to deliver amenity solely through the fit out and building services.”

With new developments, good outcomes are often achieved by factoring flexibility into the base build and fit out.

“Where possible, the delivery team should work with the occupier throughout the design and build process to ensure the finished project meets or exceeds expectations.

“Goodman Property demonstrated the benefits of this approach with the development of Fonterra’s head office at Wynyard Quarter, Auckland.

“The Fonterra Centre is a highly flexible workspace with large floor plates and internal staircases that encourage internal circulation and collaboration.

“The 5 Green Star design includes many sustainable features including a large atrium and skylight for natural light, exposed stainless steel ducts for external air circulation, internal green walls irrigated by harvested rainwater, and end of trip facilities.”

Farhi says that when delivering a project without a specific end user, delivery teams need to ensure the design and base build are flexible enough to suit occupiers now and into the future.

“For larger buildings, consideration should be given to the likely needs of the occupiers – for example, structural provision for inter-floor stairs to suit multi-floor occupiers.

“It is also important to pre-plan solutions for typical tenant fit out needs, such as the approach towards tenant cabling. This forward-thinking approach could save costly engineering work in future.”

Farhi says getting it wrong could impact bottom lines or the overall building aesthetics.

“For example, a development that creates large column free spaces, but fails to provide for a cabling solution, could result in the tenant’s fit out requiring numerous cable droppers.

“This results in an aesthetic impact and may also impact the ability to command premium rents. “

By contrast, Mercury’s new head office at Mansons’ new 33 Broadway building in Newmarket, Auckland, provides underfloor services. This solution is becoming less common as wireless internet becomes the norm in offices, but it does provide a more flexible and elegant solution to the problem of cabling.

“While achieving good outcomes is easiest with new developments, we are increasingly seeing new levels of quality in the adaptive reuse of older properties,” says Farhi.

“Projects range from character warehouse spaces through to the refurbishment of older office buildings.

“A good example is the Mason Bros building in Wynyard Quarter, redeveloped by Precinct Properties and designed by architects Warren and Mahoney. The project involved converting a seismically strengthened heritage warehouse into a three-level, fluid workspace that highlights the building’s character elements while providing modern levels of amenity.”

Mason Bros was New Zealand’s first building to achieve both a world-leading 6 Green Star and a 5 stars NABERS NZ rating. It was also awarded best in category for the Property Council’s 2019 Green Building Property Award.

“While not all buildings need to achieve award-winning levels of sustainability or architecture, the projects highlighted above all demonstrate the importance of providing flexible and efficient space – both for current and future occupiers.

“To achieve this, keeping the end user in mind is key.”


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Chris Farhi

Director

Auckland CBD

Chris is a Director wtihin the Strategic Advisory team. The team helps you with your big property decisions and complex transactions.

Chris’ background in brief:

  • Property strategy advisor for some of New Zealand’s most successful private sector, public sector and non-for-profit organisations.
  • Tenant representative (tenant-paid lease negotiator) for organisations ranging from small-to-medium enterprises through to major listed companies and government agencies.
  • Specialist skills in commercial leasing, financial analysis and market research.
  • Part-time lecturer at the University of Auckland Business School and commercial leasing trainer for the Royal Institution of Chartered Surveyors.

Chris’ qualifications include Honours degrees in both Civil Engineering and Property from the University of Auckland, and a Master of Philosophy from the University of Cambridge, UK. He is a Chartered Member of the Royal Institution of Chartered Surveyors.

Outside of work, Chris is a combat engineer in the NZ Army Reserve and a keen baker

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Rob Bird

National Director | Office Leasing

Auckland CBD

Rob has over 25 years commercial property experience specialising in Office Leasing, Commercial Property, Financial Analysis and Valuation. He is the National Director of Commercial Leasing. In a prior role he was responsible for the National Property Management business. His current focus covers Office Leasing and Tenant Representation nationwide, particualrly in the Auckland CBD. Prior to working for Colliers International, Rob held positions in Wellington and Auckland with a major international fund manager. His roles included work in property valuation, leasing, purchase and sales.

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