The race is on to improve connectivity and attract tenants, according to JLL’s latest research.
The pace of digitisation is driving corporate tenants to increasingly seek better amenity in their office space, including communal space activation and the latest technology solutions, according to JLL’s new national report, Tenant Trends, September 2019.
The research found that the priority for landlords had pivoted toward digital connectivity, with 34 per cent of real estate leaders surveyed by JLL saying technology would be their biggest increase in investment or budget allocation in the next 12 months.
Showers/end-of-trip facilities, yoga/meditation spaces, concierges and dry cleaning are also becoming the norm in many premium office buildings.
However, in cities where tenants can pick and choose, landlords have to work harder to retain good tenants.
At a glance:
Perth, Adelaide and Brisbane are currently the cities which are tenant favourable.
JLL’s researchers found Perth CBD’s office vacancy rate was 20.4 per cent in 2Q19, well above the 10-year average of 14 per cent. Brisbane tenants enjoyed plentiful incentives, while Adelaide’s 14 per cent vacancy rate had prompted businesses to ask for shorter leases for smaller spaces.
Office space remained tight in Melbourne’s CBD, with 3.8 per cent vacancy in 2Q19, and for Sydney (4.1 per cent).
JLL’s Director – Tenant Representation, Victoria, Kate Pilgrim, said that it now took more “than a ping-pong table” to impress tenants and that landlords should think more broadly about what amenities were perceived as enablers of a more efficient and happier workforce.
“We’re seeing building owners who want to compete for high-quality tenants responding with the next generation of tech-based initiatives,” Pilgrim said.
“The demand for data from consumers, cloud-based services and smart-building Internet of Things devices is increasing exponentially and I don’t really see this slowing down.”
According to JLL, more than six million people across Europe, the U.S. and Canada now work in buildings certified by WiredScore, a rating scheme that verifies landlords’ investment in technology.
It found that 85 per cent of decision-makers believed that if they don’t digitally transform within the next two years they’ll fall behind the competition, according to a report from Progress Software.
Pilgrim said the challenges facing Australian landlords lay in integrating new tech into office design.
“Where we’re moving is toward facial recognition entry that will let employees walk in without fumbling passes, visitors will be texted a QR code for entry and everyone will be able to control air conditioning from their desks,” she said.
Click to read JLL's full report Tenant Trends
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