Demand for flexible workspace on The Gold Coast & Sunshine Coast up by more than 50%
Instant releases its 2022 Australia Insights Report. The annual review of the flexible office market analyses demand, supply, occupancy, workstation rates and trends across the country.
Key Findings:
- Lifestyle cities outperform traditional business hotspots
- Occupancy rates in suburban districts 10 points higher than those in city centres
- Occupiers of flexible space are evolving, taking larger spaces and coming from new sectors
- Demand for meeting rooms has doubled in the past 2 years as companies focus their time in the office on team activities
Overall, recovery of Australia’s flex market from the COVID-19 pandemic has been slower than in other countries, with forecasts showing that total demand in 2022 will be down by 8% on pre pandemic levels (2019). Instant’s analysts concluded that this is a result of larger markets such as Sydney and Melbourne taking longer to recover. By contrast, new working hotspots in Queensland are emerging as the rise of flex work enables employees to live anywhere, placing greater importance on lifestyle.
Lifestyle cities outperform business city hubs
The pandemic has eroded the geographical boundaries of work, turning lifestyle cities into emerging business hubs. According to Instant’s report findings, demand for flexible workspace in coastal cities -- such as the Gold Coast and Sunshine Coast -- is forecast to increase by the end of 2022 by more than 50% compared to pre-pandemic levels (2019).
On the other hand, data shows that demand for city hubs such as Sydney and Melbourne will still be down on pre-pandemic levels by the end of the year, 27% and 19% respectively. Perth and Adelaide are also predicted to be down, 11% and 2% respectively, while forecasts for Brisbane and Canberra show that demand will increase by 25% and 43%.
Daniel Tyson-Jones, Regional Director, Client Solutions at The Instant Group ANZ, says “we are seeing more and more Aussies relocate to areas of the country with a warm climate, beautiful beaches, relaxed culture and affordable cost of living. This is made possible due to the changes in how, when, and where we can work from. The pandemic showed us that remote work is possible, and with flex spaces opening up right across the country, there are now ample opportunities to live and work in cities once deemed holiday destinations.”
In addition to demand increasing, desk rates on the Gold Coast and Sunshine Coast have also increased in 2022 compared to pre-pandemic levels. This year, a desk on the Gold Coast costs an average of $647 AUD per annum, up 9% compared to 2019, while on the Sunshine Coast a desk costs $650 AUD per annum on average, up 5% compared to 2019. Average rates in both markets are now similar to those found in Melbourne where it costs $612 AUD per annum for a desk, despite traditionally being at least 20% to 30% lower. This change is a result of record demand levels in both coastal areas.
Suburbia: a transition of ‘work-from-home’ to ‘work-near-home’
In addition to lifestyle cities becoming increasingly popular, Instant’s report shows that the suburban work-near-home model is also gaining momentum, meaning there is less reliance on city center locations for working space. According to Instant’s data, occupancy rates in suburbia are ten points higher than those in city centers. Occupancy in Melbourne’s suburbs is currently sitting at 78%, compared to the CBD which is at 68%. In Melbourne, popular suburban areas such as Richmond, Hawthorn, Box Hill and Heidelberg all saw interest in flex work space double in 2021 compared to 2020.
“The work-near-home approach is attractive for employees as it allows them to benefit from reductions in commuting time and costs while also improving work-life balance. This arrangement also benefits employers who gain an advantage in attracting and retaining talent by offering a hybrid way of working that doesn’t impede heavily on the flexible lifestyle we’ve come to know and love over the past two years,” added Tyson-Jones.
With an increase in demand for flexible working spaces comes an increase in supply, as demonstrated with Hub Australia focusing their expansion on city-fringe suburbs. Hub Australia Balaclava is set to open in 2024, the third city fringe flex space to open following new locations in Richmond and St Kilda late in 2021.
Corporate Companies Choosing Flex
The profile of the flex occupier is changing, with the report revealing that the number of corporate companies utilising flexible office space is increasing. Data shows that the average flex requirement size for workstations is subsequently on the rise, a trend that is more prevalent in mature flex markets such as Sydney and Brisbane where there has been an increase of over 15% in size requirements in 2022 vs 2021.
Finally, Instant’s report reveals that demand for meeting rooms has doubled in the past two years as companies focus heavily on collaboration in the office. This demonstrates that the role of the office is changing. The office is more than a desk where employees work in silos, rather it’s a space to build culture, foster relationships, collaborate, brainstorm and conduct meetings.
Download the full report to find out more…