The days of calculating your office footprint by calculator are gone

AUSTRALIA, 30 June 2022 – Now is the tipping point where companies are getting hard data on their employees new working patterns following COVID – and this has seen demand for office portfolio strategies the highest it has ever been – rising more than three-fold, according to JLL analysis.

JLL estimates a 350% increase in large portfolio strategy requests this financial year, compared to the previous FY. 

JLL’s Head of Portfolio Strategy – Asia Pacific, Lauren Day said, “We are now getting solid data on how hybrid working is playing out in real terms; how many employees are coming back to the office; their weekly patterns and which areas of the business are currently the highest users of the office as their main place of working.

“Now that we have six months of data of more normal return to work patterns, this is informing companies about what is needed for their long-term office requirements and we are seeing a huge uptick in requests for portfolio strategies and increased decision making on new strategies. This uptick has been particularly strong from March this year onwards,” she said.

JLL has done analysis on what corporates are currently asking for in their property portfolio strategies that wasn’t as strong a focus pre-COVID.

The top 3 priorities for corporates in their workplaces of the future are:

An integrated strategy that includes both the typical portfolio factors, i.e. location and cost, and workplace factors, i.e. design, space, health and wellness. Companies recognise the need to integrate workplace requirements into the portfolio strategy to inform long-term decision making;

Sustainability – what was once a ‘nice to have’ is now a ‘must have’. Reporting requirements have seen a shift to increased inclusion of sustainability measurements in portfolio strategies;

Flexibility – access to flexibility in the workplace is top of mind, not just within the tenancy itself but also providing ‘third spaces’ for workers by partnering with landlords to provide collaboration spaces in common areas of buildings and working with third-party provides for coworking spaces for project teams.

JLL’s Head of Tenant Representation – Australia, Michael Greene said, “We are also starting to see the way our workspaces are now changing post-COVID, as different companies design different types of future workplaces.

“We have seen some examples in Australia of companies when they relocate to still take the same amount of space as previously but using it differently to incorporate more collaboration space for staff. The difference we are seeing now is that companies are paying to have collaboration space, rather than simply work on the previous calculation of square metres of office space per employee.

“I think the days are over of calculating office space based on the formula of how much space you need per person. The hybrid model of working that is gaining in popularity and being incorporated into company policies has shifted this. 

“It’s not just about benchmarks for spatial requirements. Collaboration space is a big factor now and there’s been a big acceleration on setting up workspaces to reflect how people are currently working in those spaces. The ratio of individual workstations to communal spaces is changing,” said Mr Greene.

JLL has tracked office space density over time in the US and believes post-pandemic, it’s likely that space will be reallocated from dense, personal workstations to larger collaboration areas, resulting in moderately dense space.

Ms Day said another big change being seen in portfolio strategies is a ‘role-based’ approach.

“We’re working with some companies to categorise their employees so we can design workplace strategies that take into account a role-based workforce approach. Rather than use general benchmarks, we are making strategies more sophisticated and tailored to the needs of each company,” said Ms Day.