This article is from the Australian Property Journal archive
ONE hundred percent of flexible office operators in the Asia Pacific region expect meeting room demand to rise, as businesses look for adaptable and collaborative spaces that support their hybrid work models, and become increasingly risk-averse when it comes to the length of their lease terms.
Globally, 81% of operators anticipate the highest increase in meeting room usage over the coming two years. This expectation is even stronger in the UK and US, where the figure is at 91%, according to data from The Instant Group’s 2024 Global Partner Survey Report.
Remarkably, in the Asia Pacific, a full 100% of operators expect meeting room demand to rise. Operators in Asia Pacific also expect demand for private offices to rise significantly, with 86% predicting an increase in the next two years, including 14% of operators planning to expand by over 10 locations.
Co-working and flexible workspace provider Wotso recently announced it will open its first Melbourne venue early next year, after purchasing a whole Melbourne CBD floor in the historic Bank House.
In the EMEA, 52% are eyeing off one to two new locations and 39% up to five new locations.. In the UK, 73% of operators plan to expand, 46% of them up to two new locations. In the US, 55% of operators are planning to expand, with 36% look at up to five new locations.
Wellness amenities will see further growth in the UK, with 64% of operators anticipating increased demand, as comfort and wellness features, and dedication to workplace sustainability, become a priority for businesses that understand the value of supporting employees’ holistic well-being.
Nearly half of global operators expect companies to further raise employee-to-desk ratios, which would allow for cost optimisation and more efficient space utilisation. On busy days, day offices and co-working desks help accommodate any overflow without significant investment.
Costs remain a top concern, according the report – 37% of operators say cost is the top reason prospects choose not to sign – while overall profitability is up. Last year, while costs soared, fewer than 20% of operators passed those expenses on to customers. This year, however, 69% plan to raise rates.
In the Sydney CBD, desk rates were up 7% to $1,000 per desk per month over the past year, according to Rubberdesk – and the rate is even higher in more in demand locations such as Barangaroo, where the rate was at $1,301 per desk. Rates were down in Melbourne’s market, with a 2.4% to $725, as the city faces market-wide vacancy pressures, while in Brisbane, supply and demand remain relatively balanced, with the average desk cost $619.
As labour and material costs climb, landlords are either moving into the flex space market or pulling back on co-investments, The Instant Group report showed.
“Striking the right balance between staying competitive and improving margins remains a challenge,” the report said.
“Growth is at a crossroads.”
As a result, operators are exploring new investments and revenue opportunities.
The report said competition from traditional leases and limited external investments are also concerns.
“Expanding operators may face challenges from competing supply or lower external investment from hesitant landlords and investors.”
Occupancy is the top driver of success and growth. Globally, 86% of operators report occupancy rates above 70%.
