Property Management:: Office of the future – Making the most of workplace trends

A little further into the Information Age and many of today’s white-collar workers will be replaced by ‘gold-collar workers’, according to forecasts by business generals such as Tom Peters. As the piecemeal and contract work delivered by these highly-skilled-few replace the jobs-for-life-for-many model, catering appropriately to people’s accommodation needs and desires will be business imperative. Acknowled-ging this trend as truism now and treating the office as management tool can leapfrog you ahead of the pack today.

In business context, the New Zealand psyche is an interesting paradox. On the one hand we rightfully pride ourselves on our unquestionable inventiveness – our ability to create anything out of nothing. But, in relation to leading-edge business trends created elsewhere, we can be some of the most tentative and change-averse people in the western world.

We frequently hang back for five to 10 years from trends showing promise and take-up overseas. This lag can mean the commercial advantage available to those adopting the practice is delayed or at times, lost altogether.

This observation seems to be especially applicable when it comes to office space decision-making. Rather than seeking out and embracing opportunities to leverage more value from our offices, we give office decisions insufficient time to do them justice, then allocate insufficient budget to create the required effect. Our managers simply don’t approach organisational real-estate decisions with the same level of sophistication and rigour as they do say, annual business planning or information technology decisions. ‘Why’ is something of mystery since the cost of leasing and servicing offices is invariably second only to staff salary costs, and the opportunity to get more bang for the buck would seem to be immensely appealing.

Social paradigms are being turned on their heads. The changing structures of family and workforce demographics are encouraging people to review their work/life mix, including tendency to intersperse both more than before, in order to achieve the requisites of each. Concurrently, globally urbanisation is dominating social re-organisation as people migrate to live in cities. In New Zealand we are moving to live in the main centres, and increasingly that means inner-city living. Our lifestyles have become increasingly cosmopolitan and the speed of this change process is gathering momentum.

The death of CBDs?
Every CBD has its own heartbeat and soul and collectively, New Zealand’s principal CBDs pump much of the economic lifeblood through the country’s arteries. Speculation on the future sustainability of the CBD in recent years has focused on the decentralisation or disintegration of some large businesses and the increasing trend toward distance working. It might have created some uncertainty for CBD property investors and business leaders focused on their office accommodation decisions but at least here in New Zealand there’s no need to worry. All current indications are that there will be no obituaries read for our CBDs. In fact quite the opposite – they’re thriving.

Some companies in pursuit of (sometimes) cheaper and more generous space, easier and more plentiful parking and more affordable naming rights will factor the outer realms into their decision-making, and they may be better off there. The Albany Centre on Auckland’s North Shore is good example of development established away from but in close proximity to the main CBD, with the intention of creating vibrant new city centre of sorts. The developers, The Neil Group, capitalised on the proximity of the 128-hectare site to major arterial roading networks and the opportunity to establish an alternative to the CBD for mix of businesses, with apparently considerable success.

However many organisations continue to find CBD location commercial imperative and New Zealand’s CBD office building vacancy rates are now uniformly very low. It is not easy to readily find any significant area of prime office space in Auckland, Wellington or Christchurch. Wellington’s prime office vacancy rates are approaching nil and with little in the way of new construction under way, it will continue to be difficult to satisfy demand. The limited supply at the top end of the market in all major centres has flow-on effect to their lower quality office space, such that finding suitable existing accommodation for large organisations in the market nationwide is challenging.

Matt Hince, Wellington-based leasing specialist for DTZ New Zealand, says there just aren’t any large space parcels waiting for take-up at present. “To satisfy larger space requirements takes creative approach, looking at where client organisation’s needs might be met if existing tenancies can be moved around or even relocated elsewhere, to everyone’s satisfaction naturally. You must take big picture view of the problem and be creative and resolute to solve it.”

People are important
In establishing 3000 square metres of office space for the Food Safety Authority in July, Hince transacted the largest leasing deal in Wellington in 2002 to that time. He says that organisations he associates with, whether public- or private-sector based, are trying to upgrade the quality of their accommodation where possible, in order to provide better environment for their people. “There is move to better quality space, to provide people with better accommodation. Employees seem to be valued more highly than they were and my clients are often driven to particular offices that they feel will enable them to attract and retain people through the improved space.”

Involving staff in the process of office selection and reconfiguration is now more commonplace. Greg Ball, managing director of the Property Group, says that “10 years ago employees wouldn’t have had any input into the accommodation decisions. Now leading manager wouldn’t presume to impose conditions, locations and so on. People are empowered to make case to convince the manager.”

Smarter office landscapes
Leveraging optimal value from the office as the world changes is now about setting up an environment to encourage individual creativity to flow in the right direction, and in concert with organisational missions and objectives. It means eliminating ‘dumb’ space in favour of ‘smart’ space. In other words, develop an environment to lever maximum productivity and to encourage the kind of culture you want for your organisation, be it ‘open,’ ‘highly communicative,’ ‘interactive,’ or whatever. Alan Henderson, managing director of the Henderson Group 2000, considers that the process of ‘opening up’ the office energises people. “We need to remove physical barriers to illustrate the transparency that everyone talks about today.”

Creating smart space involves, at option review time, taking strategic view of the business to be accommodated. This includes consideration of the needs and expectations of customers, staff and other stakeholders, and the creation of cohesive social environment for people as well as workplace. Henderson calls it creating “corporate soul”. “To survive you must be caring company. Personal and business lives are intertwined; they’re one. Feel-good things are important. There must be corporate soul. We talk about healthy company; we need healthy individuals. Where individuals have souls your company will have soul.”

Meanwhile, alternate work practices such as home working, telecommuting, desk sharing and satellite and virtual offices have arrived to supplement the traditional CBD office and the integration of these with the office activities needs careful management if they are to enhance rather than hamstring the business. All these practices, enabled by new technologies, are resulting in people working at greater physical distances from one another at times, and that creates challenges to communication, staff interaction and the dissem

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