How important is the physical office when it comes to workplace strategy? It’s critical judging by a new CBRE analysis, which shows that 77% of businesses have paid the same if not more when relocating their Australian CBD offices over the past 18 months.

The premiums have stretched into double figures, with CBRE identifying a 10.4% uplift in median face rents on the 138 relocations tracked since 2021.

Sameer Chopra, CBRE’s Head of Research – Pacific, said, “Since office leasing activity started intensifying in early 2021, a clear trend of tenants looking to upgrade their premises has emerged. Re-locations allow occupiers to move physically closer to their end customers. It allows them to re-configure workplace design to attract and retain talent and match ESG ambitions with energy and wellness offerings in the new premises.

CBRE’s data highlights that while all sectors have paid relocation premiums over the past 18 months, Design & Engineering and Finance firms have led the pack.

Design & Engineering firms accounted for 13% of all re-locations but also led the trading up trend, with a c35% rental premium for new locations. Within Finance, trade-up was dominated by Investment and Wealth Advisory firms, rather than Banks and Insurers.

Mr Chopra said small to medium sized businesses (taking up to 5,000sqm) had grown their footprint by c7% via renewals and re-locations, although this was partially offset by large occupiers taking up less space.  

Janet Martin, CBRE Pacific Regional Director, Workplace Strategy and Change Management said, “Our clients are using workplaces as part of a broader remuneration package; a tool to attract and retain staff. A workplace is part of a competitive edge for a company and staff need to want to be in it, not mandated to be in it. There needs to be mindful planning, design and utilisation of a workplace with different experiences over the day and the week, and a focus on teams and groups as well as individuals, so the asset is seen and used in a dynamic and variable manner rather than being a static place. This also sweats the asset, so that it works harder.”