- Market conditions are overwhelmingly favourable to tenants as the office market improves, according to JLL’s Tenant Perspectives research
- As the battle for strong, long-term tenants heats up, landlords are focusing more on recruitment and retention methods that cater to employees’ demands and foster loyalty
- Nationally, premium office space has a 10.2 per cent vacancy, A-grade a 14.1 per cent vacancy and B-grade a 16.1 per cent vacancy
- Across 23 new projects and five major refurbishments, 753,500sqm of new stock is currently under construction, set to be completed by 2025
According to JLL’s Tenant Perspectives report, market circumstances are strongly in favour of tenants as the office market recovers.
As the battle for strong, long-term tenants heats up, landlords are focusing more on recruitment and retention methods, such as delivering increased incentives, amenity, and customer experience techniques that cater to employees’ demands and foster loyalty.
“For the first time ever, that we are aware of, the incentives to stay put are on a par with those to relocate. We are now firmly in a market favouring tenants,” JLL Head of Tenant Representation of Australia Michael Greene said.
“Corporate tenants and their people now expect much more from the office. The workplace is no longer solely defined by a tenant’s premises, now extending to the whole building, its services, amenities and conveniences.
“Occupiers are looking at incorporating key initiatives including virtual collaboration tools, wellbeing programs and employee experience initiatives. In Sydney, we have seen an 8 per cent increase in the loyalty rate — from 26.5 per cent at the end of June 2020 to 34.5 per cent at the end of June 21. Most notably, in a reduction of rent across all grades by up to 13 per cent.”
Tenants are rethinking their working patterns and workplace requirements, according to Mr Greene.
“In every office market across Australia, post-pandemic workplace strategy has an increasing focus on hybrid working arrangements, allowing tenants to both rationalise their space requirements and improve employee satisfaction,” he said.
“As part of this, occupiers are choosing to implement strategies that are highly personalised to brand and culture values as well as people and community requirements. This is part of what makes office space requirements and the evolution of the workplace so interesting – it’s not a one size fits all approach.”
Nationally, premium office space has a 10.2 per cent vacancy, A-grade a 14.1 per cent vacancy and B-grade a 16.1 per cent vacancy.
Across 23 new projects and five major refurbishments, 753,500sqm new stock is currently under construction, set to be completed by 2025.