So you work in an office?June 16, 2011 / By
Every week-day morning around two million Australians tumble out of bed and, with varying degrees of enthusiasm, go to work in an office.
Nothing surprising about that – but if you are an office worker, here are a few questions.
Firstly: did either your father or mother work in an office? If the answer is “yes”, then here is a second question: did any of your grandparents work in an office? If the answer to all these questions is “yes” then you are a third generation office worker, and this makes you are a very rare person indeed.
I estimate no more than 5% of today’s office workers in Australia are descended from two generations of office workers.
It can be argued that a generation is a long time. But commercial property assets have long life expectancies. Almost half the Sydney CBD office stock is 30 or more years old.
Does this matter? Perhaps not, but here is a fourth and final question – do you think that your grandchildren will work in an office? If the answer is “yes” then you believe that the waves of demography and technology that propelled so many of us from farms, factories and corner stores and into offices in just three generations have suddenly skidded to a halt.
The facts suggest otherwise. The pace of change seems to be speeding up, not slowing down.
A popular metric of efficiency in the use of office space is the workspace ratio – the number of square metres of space occupied by each office worker. A typical office workspace ratio is 15 square metres per person. Reliance on simple metrics can be handy but risky. Technology is freeing up office workers to leave the office. Occupancy in offices has been falling and is now often between 40% and 50%. A 40% occupancy rate means that the average workplace is only occupied for two days out of a five-day working week. That’s expensive space.
No-one knows for certain how these trends will play out in the future. Rules of thumb like workspace ratios and turnover per square metre in shopping malls are convenient short term indicators. But prepare for a life of surprises: Technology is challenging many of these benchmarks. Property investors make big commitments to assets with a long life expectancy. More than any other sector of the economy, property investors and developers need to think outside the box.
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