Activity-based working trend set to sweep Melbourne office market

It's called activity-based working and it's a trend that is set to sweep across the Melbourne office market as tenants look at ways to consolidate and improve efficiency in the workplace. The new innovative workplace model, commonly known as ABW, basically allows employees to work on projects in a shared environment rather than individual cubicles.

The trend was one of the findings unveiled in the new CBRE Office Market Survey, which analysed the views and behaviours of Melbourne office owners and tenant representatives. It found that while many CBD tenants haven’t made the transition to ABW yet, "a large number were exploring the concept and considered it important that buildings could accommodate this increasingly popular workplace model."

Nearly 90% of the owner respondents said it was important that office buildings had the ability to accommodate flexible fit-outs such as ABW.

CBRE Regional Director of Office Services Andrew Tracey said ABW was becoming a more popular concept both in Melbourne and Australia-wide.

"The by-product is also a saving in property costs through space consolidation and more sustainable and energy efficient systems."

Among the early adopters of ABW in Australia were Macquarie Bank, Microsoft, NAB, DEXUS, GPT Group and Goodman. CBRE has rolled out the model at its Sydney office and plans are underway in Melbourne.

As expected, the survey found that the main driver behind a tenant’s decision to relocate was reduced total occupancy costs, followed by a change in location and reduced total footprint. The survey also showed that attractive incentives on offer in the Melbourne market were encouraging tenants to look at relocating, with 81.49% of owners and 68% of tenant reps expressing this sentiment, CBRE said.

The majority of owners thought that current incentive levels were at a lower range, either 20% - 24.9% or 25% - 29.9%, CBRE said, while tenant reps thought incentive levels were closer to 25% - 29.9% and 30-34.9%.

Both groups expect that in the longer-term, incentives will reduce as the office market strengthens.

Over the next six to 12 months, the respondents believe that the most active tenant sectors in the market would be financial/insurance and electricity/water/gas.

Owners expect smaller tenants -between 0-300 square metres and 300-700 square metres - to account for the most market activity.  Tenant reps believe mid-size tenants will emerge as the most active.

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