Sydney, NSW, Australia

Business decision makers are waking up to the importance of wellbeing in the workplace, and environmental sustainability is playing a much greater role in workplace selection and design than it did three years ago, according to the findings of the Colliers International 2008 Office Tenant Survey.

The independent primary research project surveyed 270 large office tenants who occupy space of 500sqm or more in a head office location in Sydney, Melbourne, Brisbane, Adelaide, Canberra and Perth.  Interviews were conducted in May and June this year. 

The aim of the research was to examine the current and future expectations of office tenants across Australia.  It follows a similar survey undertaken by Colliers International in 2005.  The key findings cover expectations regarding workplace relocation and design, the importance of building selection in staff attraction and retention, changes in staff culture and tenant’s attitudes and demand for environmental sustainability in their workplace.

Colliers International Commercial Research Director Felice Spark said the 2008 Office Tenant Survey findings showed organisations in Australia have significantly changed their attitudes towards workplace selection and design since 2005.

“Tenants have become enlightened in the last three years.  The findings show a real desire to maximise staff health and wellbeing.  There has been a huge upsurge in the awareness and demands for better working environments by tenants,” she said.

Ms Spark said the most notable changes in the results of the 2008 survey compared to 2005 revolved around increased awareness of issues regarding environmental sustainability, including a significantly increased demand to occupy  environmentally sustainable buildings and fit outs.

“The changes show that tenants are noticing a big change in staff demand for environmental sustainability in their workplace.  The push is coming from their people and so it has become a major issue in staff attraction and retention.”

“Tenants have noticed staff are not automatically accepting the traditional office set up.  They want to work in new, modern workplaces and they are very environmentally aware,” she said.

Simon Crouch, State Director – Corporate Services agrees.  “Organisations are listening to the needs of their staff when making property decisions to assist in the critical battle for talent”.

“Whilst costs are important in the current economic environment many of our clients consider property expenditure as an investment in their business and a major contributor to staff satisfaction and productivity,” he said.

When it came to the most important attributes for tenants in attracting and retaining staff, Colliers International found the ranking of importance of building attributes remained very similar to the 2005 results with one outstanding change: the importance of a building’s environmental performance has moved up the list from #14 to #8 in terms of importance in attracting and retaining staff.

The survey found 77% of tenants are implementing environmental sustainability in their new workplace fitout in 2008, up from 49% in 2005.

Mr Crouch said in his experience environmental sustainability is playing a greater role, however there is still room for improvement.

“There has certainly been a large shift in awareness.  It’s certainly a critical contributor now, whereas five years ago it wasn’t even in the mix,” he said.

“Certainly now there is an expectation amongst larger occupiers for new buildings to achieve a 5 Green Star rating as a minimum, and over the next few years we expect more tenants to actually implement these initiatives.”

More than half of tenants surveyed said they believe there is strategic value to their business in occupying a green building and they would be prepared to pay more rent for this value.

Ms Spark said the top drivers motivating tenants’ desire to occupy a green building in 2008 are Corporate Social Responsibility, operational cost savings and improved ability to attract and retain staff.

The proportion of respondents who stated their organisation has a process for evaluating environmental performance when selecting buildings rose from 26% in 2005 to 47% in 2008.  Furthermore, a considerable proportion of organisations now measure their carbon footprint (39%) and report on their environmental performance publicly (35%), questions which were not previously included in the 2005 survey.

“This raised environmental awareness results in higher expectations in the efforts of building owners to improve environmental performance.  Although a reasonable proportion of owners are perceived to perform relatively well in this regard, 52% of respondents stated their landlord’s efforts were at best mediocre in terms of improving environmental sustainability.”

As predicted by Colliers International’s first Office Tenant Survey in 2005, the NABERS Energy Rating (formerly ABGR) has become more widespread in the past three years. 

Mr Crouch said this change has been driven by public awareness and education from within the property industry.

“Not only are the majority of respondents now familiar with the rating (up from 42% in 2005 to 61% in 2008) , the proportion of those tenants who currently  have a NABERS Energy rated tenancy  has risen from 8% in 2005 to 17% in 2008,” Ms Spark said.

“The Green Star Rating is even more widely recognized with 70% of tenants familiar with this rating scheme.” 

The survey found more tenants are thinking about moving today than they were in 2005. 49% have relocated in past two years or plan to relocate in next three years, while 22% have redesigned their workplace in the past two years or plan to redesign in the next 3 years.  In total, 71% of tenants have changed or are planning to change their workplace requirements over this five year period. 

Business expansion, convenient building location, consolidation and building environmental performance were the top four reasons tenants said they will move in the future.

“When leases are coming up to expiry the majority of our clients see this as an opportunity to improve their workplace rather than retain the status quo,” said Mr Crouch.

“They are willing to invest the money in a relocation if their existing premises no longer meet the needs of the business and their staff. The costs of such an exercise will be closely scrutinised in the current economic environment and weighed up against the benefits a redesign and/or a relocation,” he said.

The 2005 survey found changes in the redesign of the workplace were predominantly focused on team collaboration and knowledge sharing.  In 2008, the survey found this was still an important factor, however Ms Spark said the focus has turned to sustainability and staff wellbeing.

“It is also apparent that tenants are looking for a greater level of flexibility when selecting buildings.  This year, respondents were more likely to specify the need for a workplace that is easily transformed to support shifting needs and flexible lease terms that allow for change,” Ms Spark said.

Mr Crouch said flexibility is critical in the current economic environment due to uncertain growth expectations.

The survey findings showed the battle for talent has had an increasing impact on business and flowed through to property decisions.  The 2008 survey found the proportion of tenants stating that building selection is important in staff attraction and retention increased from 44% in 2005 to 54% in 2008.

Ms Spark said while workplace accessibility continues to be the most important factor in attracting and retaining staff, the following factors rate significantly higher in 2008 than they did in 2005:
• A building’s environmental performance
• Indoor air quality and thermal comfort
• High-level security
• Cutting edge ICT
• On-site facilities (common spaces, changing rooms, gyms, childcare)

“The increased focus on these building selection criteria closely reflects the changing expectations of staff who now demand new and modern facilities that meet high OH&S and environmental standards,” said Ms Spark.

WANT TO KNOW MORE?
The findings from the Colliers International Office Tenant Survey 2008 are currently being presented in a national client roadshow.  A publication outlining the key findings will be released later this year.  To request a presentation or copy of the publication, please contact Colliers International Commercial Research Director Felice Spark on 02 9257 0289 or email felice.spark@colliers.com.

About Colliers International

Colliers International is a global affiliation of independently owned commercial real estate firms. The organization's 10,092 employees span the world in 267 offices in 57 countries. On a worldwide basis, Colliers manages 672,945,918 square feet, and has revenue of $US 1,620,958,349.

Contact Information

FOR MEDIA ENQUIRIES PLEASE CONTACT:
Phoebe Miller
National Communications Manager

Tel: 02 9257 0276

Mob: 0402 547 484

Email: phoebe.miller@colliers.com 

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