In Perth, where Premier Mark McGowan says COVID-19 has been “crushed and killed”, there is nothing preventing workers from returning to the office in pre-pandemic numbers.
Yet they are not. Many workers in the Perth CBD are spending at least a day or two every week away from the office and working from home, a shift taking on the aura of permanence.
Since April, the Perth CBD office occupancy rate, based on a Property Council of Australia survey of staff numbers, has averaged 77%. In that period, it has gone no lower than 76% percent and no higher than 78%
Staff office numbers have declined by 23% and there is no sign they will increase. In fact, the reverse may be true with employer attitudes undergoing significant change since the onset of the pandemic and the embrace of hybrid work.
For example, Chevron Australia announced in early June that most of its 1800 Perth office staff could work from home on Mondays and Fridays. Chevron set aside Tuesday, Wednesday, and Thursday as the preferred days to collaborate in the office.
A company spokesman said the decision was based on staff feedback and experience through COVID-19.
“It will provide greater flexibility for our workforce and enable us to continue to build our collaborative, innovative, and inclusive culture,” he said.
The announcement sent shockwaves through Perth’s commercial property community but missed in the brouhaha was Chevron’s commitment to a new state-of-the-art 29 level office building at Elizabeth Quay, due for completion in mid-2023.
‘The genie is out of the bottle’
Chevron is still committed to the central office concept but will use it differently, an approach being endorsed by many companies that are not looking at reducing their office space but changing how they use it.
Ian Edwards, partner and joint head of office leasing in Western Australia for Knight Frank, said the office dynamic has flipped.
“It probably is the new normal, and as an office leasing guy I don’t really like saying that but what we are going to have is a lot more people working from home,” Mr Edwards said.
“It’s inescapable, the genie is out of the bottle.”
Sandra Brewer, executive director of the Property Council in Western Australia, added that “maybe Perth is the case study of what return to office will look like in the future now that we’ve all learned new flexible ways of working.
“I also think there’s definitely changed behavior by people who are concerned about the virus being in the community.”
She said office numbers were also down because some international employers operated with blanket global restricted work policies despite the absence of COVID-19 in Perth. She cited a foreign-owned digital marketing agency where staff are required to wear masks on-site.
“The big change we’re seeing on the ground is that demand for premium grade stock from the professional services, mining, resources, oil and gas companies is now so high because they know they need to attract people to work,” she said.
“If you want people to leave their living room to come in and spend the day collaborating with their colleagues, then you need to have a pretty cool place for them to want to be.”
Matt Billingham, Australia, real estate lead for Turner & Townsend, said his company has embraced hybrid working with some staff choosing to work from home. But he does not expect to take less corporate space when it moves offices within the next 12 months.
“We need a different kind of space now,” Mr Billingham said.
“Better breakout facilities, more collaboration space, more small meeting rooms and what we’re calling phone booths, where people can plug in, sit down, and have their meeting without disturbing other people.”
Nick O’Hara from workplace designer IA Design said no clients had asked for less space in the past two years.
“No one’s coming to us saying ’you know COVID’s hit us, we’re all working from home, get rid of all this space,” Mr O’Hara said.
“The mining sector is very adamant about it. They have 100% embraced the three days in the office and two at home approach. But they’re not reducing their footprint.
”We’re converting space into video conferencing rooms. A lot more quiet rooms, VC rooms, conference rooms, smaller ones, are going in. And we’re putting in a lot more collaborational and casual seating areas [for a] bit of a homely environment in the office.
“The technology has taken over completely now.”
Originally published in Australian Financial Review
September 15, 2021