Office landlords need to offer not just bricks and mortar for tenants, but have a "placemaking" focus, according to agents.
Speaking at the CBRE annual office market outlook conference last Wednesday, the senior executives on the panel said the new theme of placemaking was an integral part of an office lease.
![DEXUS Property has upgraded its food court at Sydney's Grosvenor Place, to ensure staff in the building have relaxation ...](/web/20170305164625im_/http://www.theage.com.au/content/dam/images/g/u/j/y/r/l/image.related.articleLeadwide.620x349.gujybn.png/1487983758333.jpg)
The group's head of research, Stephen McNabb, said having a placemaking focus would help unlock value "through asset management and repositioning".
He told the 100-plus audience that real estate was moving "beyond functionality" and the trends were on wellness, end-of-trip facilities and now childcare in properties.
This has been reflected in new developments, such as at Grosvenor Place in Sydney, where DEXUS Property has upgraded the food court to ensure staff in the building have relaxation spaces and healthy eating options.
CBRE's president and chief executive for the Pacific, Ray Pittman, said the alliance between agents, landlords and tenants "does not end when the lease is signed".
"That is really just the start as the end goal is to make the company attract the best talent and that talent now wants a range of facilities," Mr Pittman said.
CBRE senior director asset services Amanda Steele said on the panel that the most recent CBRE occupier survey highlighted that a growing number of occupiers surveyed were now measuring the impact of their wellness initiatives on staff productivity.
Ms Steele said respondents with wellness strategies reported substantially improved metrics in regard to a reduction in absenteeism levels and workers' compensation claims, higher scores in employee satisfaction surveys and improved staff retention levels.
"When asked what their building manager was doing really well, most occupiers, being 50 per cent, focused on the functional aspects of building management, calling out responsiveness, good communication and good basic service/maintenance," she said.
"Only 10 per cent commented on tenant services, and a surprisingly high 46 per cent of respondents gave no feedback stating that nothing stood out, highlighting the need to deliver a more enhanced tenant services offering.
Also on the panel was Jenine Cranston, CBRE's senior director, advisory and transaction services office, who said landlords needed to "sweat" the assets, which means they must offer more than just four walls and a roof for tenants.
"This ranges from technology through to childcare offerings. We talk a lot about placemaking with our clients," Ms Cranston said.
According to the CBRE survey, one of the biggest gaps when it comes to tenant satisfaction relates to base building services and their ability to support the delivery of technology. Addressing this would have the biggest impact on tenant satisfaction levels.
Occupiers are looking for buildings that can help them do everything from ordering a coffee from their desk ready for pick-up as they head out the door, to data that can help them understand the demand patterns of their people.
Landlords are also cautioned not to assume that their "stayers" are happy, because they had the lowest satisfaction scores overall, particularly in relation to lift performance, workplace efficiency and technology. They were also the most dissatisfied with their end-of-trip (EOT) facilities – suggesting that an upgrade to EOT could be one approach for landlords to assist with tenant retention.
This comes as Australia's south-east property markets will continue to outperform in 2017, producing the strongest rental growth and the highest total returns, according to new CBRE forecasts.
Mr McNabb said property fundamentals were strongest in the office sector – particularly in Sydney, Melbourne and Canberra, given the outlook for net effective rent growth.
"The distinguishing factor is the outlook for rent growth of circa 8 per cent in Sydney and Melbourne in the next three years," Mr McNabb said.