In New Zealand, office is clearly here to stay!

January 25, 2022 / By  

This message is loud and clear from the responses we received from employees, occupiers (employers) and property owners in our New Zealand Office Sentiment Survey.

The office continues to have a critical role to play in the workplace environment. However, it will need to evolve constantly to ensure it meets the needs and requirements of occupiers and their employees.

While the pandemic has accelerated the change of the flexible work-from-home model, the home environment does present its own challenges – lack of a dedicated workspace, interruptions, and social isolation, to name a few.

Increasingly, employees are becoming more vocal about their workplace expectations. This creates an opportunity for employers to gather information and create an environment that assists their attraction and retention strategies.

The two most important workplace factors occupiers identified were quality of space and location for ease of travel for their employees across Auckland, Wellington, and Christchurch.

Figure 1: What is the most important aspect of an office for employees?

Source: JLL

We’ve seen owners going by the old adage, “a bird in the hand is better than two in the bush”, as the sheer majority have worked with their tenants throughout the pandemic assisting them maintaining tenancy terms.

Here are the five key trends in New Zealand’s expectations of the office:

  • The office remains integral to corporate strategy. ‘Office nostalgia’ is prominent and most pronounced in outstanding offices, meaning the office has a major role to play in navigating periods of uncertainty. 85% of employees now want to be in the office full time or at least 2-4 days a week, and only 2% want to work from home permanently.
  • Sustainability is most important for owners. Despite a greater focus on environmental conditions, owners placed more emphasis on its importance than occupiers or employees. With 13% of owners now considering improving sustainability, only 5% of employees consider this as their first choice for workplace considerations.
  • The office market is now defined by strong collaboration. Throughout the pandemic, owners and occupiers have worked together to maintain tenancies with initiatives like rent relief and fit-out incentives. 92% of owners have provided assistance to their occupiers during COVID-19, while 39% stated their number one priority was to meet occupier needs.

Figure 2: Supported by owners to their tenants?

Source: JLL

  • Flight to quality is an ongoing trend. An increasingly competitive labour market has seen the office become a means to attracting and retaining talent. The two most important workplace attributes identified by occupiers are the practical and aesthetic quality of their workplace and the location for its proximity to amenities and ease of travel for their employees.

Figure 3: Workplace models considered by occupiers

Source: JLL

  • Medium lease terms continue to be the norm. While the majority of occupiers committing to short-to-medium lease terms, many owners believe this was in effect before any impact of COVID-19. 47% of new lease terms are between 1-3 years, and 34% are between 4-6 years, while our respondents reported extremely high levels of occupancy with more than half at 100%.

This confirms the office is clearly here to stay and will be more important now than ever before as the centre of the work ecosystem, and outstanding office environments will remain a critical way to engage employees.

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