Rethinking The Australian Office

DEMAND

PERHAPS MORE THAN ANY OTHER SEGMENT OF THE COMMERCIAL REAL ESTATE (CRE) UNIVERSE, THE OFFICE MARKET HAS UNDERGONE THE LARGEST STRUCTURAL CHANGE SINCE THE ONSET OF THE COVID-19 PANDEMIC. Mandatory lockdowns accelerated a shift of traditionally office-based workers to work from-home (WFH). Although there is evidence that a normalisation in working practices has been underway since 2022, the sudden adoption of WFH forced both employees and employers to become accustomed to new habits. Companies are continuing to adjust policies to find the optimal blend of in-office working and WFH. Benefits of in-person interactions that offices enable include team building, mentorship, and productivity-boosting network effects, amongst others. Against this backdrop, most employers have encouraged a return to in person working for at least a few days a week. Employers have been hesitant to directly mandate a return-to-office (RTO) policy amid a tight labour market that has increased employee bargaining power. Furthermore, analysis has shown that while mandated office attendance boosts the level of attendance, it detracts from employee wellbeing and productivity. As a result, employers have looked for ways to incentivize RTO without directly mandating it.

4