Some key structural changes have surfaced in the office sector post-COVID-19 as corporates and businesses embrace a decentralised workplace model that offers more resilient and flexible solutions.
Daniel Henderson, general manager Bayleys North Shore Commercial, said there is a noticeable and growing trend to having a more distributed workforce and this is particularly apparent north of Auckland’s CBD where large corporate occupiers are cementing a sizeable presence in the Takapuna and Albany catchments.
The core + flex or hub-and-spoke model was already well-advanced pre-COVID-19, but the lockdowns and subsequent movements through alert levels highlighted the shortcomings of having all workplace eggs in one geographical basket.
“There are business risks associated with expecting all staff to commute long distances to one CBD head office and/or having all business collateral housed in one central location,” explained Henderson.
“Pandemic-related hiccups aside, when you consider that more than a quarter of Auckland’s population lives on the North Shore and you throw a substantial spanner like the harbour bridge into the mix, it’s making bottom-line business sense for corporates to consolidate their operation north of the CBD.
“It only takes a truck to roll on the harbour bridge, as happened recently, to realise how quickly the ripples spread and how the transport network can be derailed by one incident.”
Henderson said the COVID-enforced work-from-home scenario was the polar opposite to the centralised office model and now the market is settling to a more-flexible paradigm, with comprehensive hubs like Smales Farm meeting the need for fluidity, convenience and high levels of amenity.
“The now-accepted trend for work-from-home flexibility when required or desired has to be balanced against productivity, team culture and collaboration,” said Henderson.
“Having a satellite office close to where significant numbers of staff work means commute times are slashed, children can be dropped off easily at local schools, and workers are more integrated with their local community – which is the way things used to be in New Zealand when most people worked close to home.
“Then there are the operational savings associated with premises outside of the CBD with generally lower rents, lower carparking costs and reduced OPEX – but with no compromise on amenities.”
Henderson said Smales Farm is a best-practice example of how a satellite precinct should look, feel and deliver choice to astute business operators and corporates seeking a more-resilient and tailored solution to their office requirements.
“Along with more traditional and dedicated office leasing structures, Smales Farm has B:HIVE – Australasia’s largest and smartest co-working building that was voted best office in the world at the 2019 World Architecture Festival,” he said.
“The slickly-managed and operated co-working space is a complete game-changer in the quest for quality, well-located and well-supported office space on the North Shore.
“From corporates to start-ups, B:HIVE allows companies to run their business not their office and is inherently flexible enough to flex to changing staff needs, market swings, tweaks to business models and adaptable lease terms.”
Smales Farm has prioritised well-being and wellness opportunities within the hub, along with social networking and hospitality offerings via its destination dining Precinct, Goodside.
“Being part of Smales Farm offers a business the opportunity to create a new way of working that is fully-integrated with work-from-home options when required, yet so compelling that staff will want to get out of their pyjamas and head to the office giving managers and owners reassurance around productivity, corporate culture and collaborative work styles.”
Henderson said no part of the Auckland region’s office sector has been untouched by 2020’s social and economic narrative, but added that the North Shore market could hold its head high with vacancy rates that fared better than the CBD’s.
Bayleys Research’s recently-released market survey data showed that total office vacancy on the North Shore rose from 5.1 percent to 6.9 percent from January to December 2020, while Auckland CBD’s overall office vacancy increased from 5.4 percent to 9.94 percent in the same period.
The Takapuna office market’s vacancy rates rose from 5.3 percent to 6.3 percent during 2020; Albany’s office sector showed a more subdued increase in vacancy – from 5.3 percent to 5.9 percent.