Guest authored by Brooke Jamieson, Head of Experiences at smart spaces platform PlaceOS.
The pandemic has accelerated two ongoing trends: a decline in the traditional use of real estate, particularly retail, and an increasingly flexible approach to work.
For example, a recent Retail Market Overview by JLL reported that vacancy across the Australian core retail sub-sectors increased by 1.3 per cent in the six months to June 2020, to an average of 5.2 per cent. This is the highest vacancy rate recorded in over 20 years.
In addition, our workplaces have never been so flexible. Most employees are now working between the office, their home, or a satellite office/coworking space. We’ve seen the rise of activity-based working, where employees have the agency to choose the best space for the work they’re doing.
As I see it – empty shopping centres could, and should, become the workplaces of the future.
Commute times in Melbourne and Sydney have blown out over the past five years, and I think it’s impossible to have an honest conversation about employee experience or workplace wellness without factoring in the cumulative time and stress that commutes cause for most employees. After all, the workday begins well before the employee sits down at their desk.
As we look towards “the future of work” or “the new normal” it’s important to think about what these phrases mean. The role of the workplace is still relevant – for productivity, culture, security and engagement – but the format is up for renewal.
Working from home permanently isn’t for everyone. For instance there are some things that cannot be replicated via Zoom calls, such as building meaningful relationships and catching your colleagues for water cooler chats.
However, it doesn’t have to be all or nothing. If employees don’t want to travel an hour each way to the CBD, and employers don’t want to spend money on extra floors of CBD rent – they are reaching for the same goal. I’m not saying inner city offices are dead – just that instead of 10 floors of a tower, companies could move to 6. With the extra savings, they could open up flexible working spaces on the city fringe which makes the workplace closer to where their employees live.
This solution offers a sweet spot for each organisation and their employees, and how they choose to work during the week.
And if you’re looking for well maintained real estate in city fringe areas with great public transport and amenities, look no further than shopping centres. It’s a perfect match.
Real estate companies that own these empty tenancies are sitting on an opportunity. And they don’t need WeWork to come along and do this for them – they need good design, good technology and great customer service.
Take the best aspects of the leading coworking spaces, but also use human centred design and good old-fashioned intuition to understand how you can connect this new generation of workspace with the existing tenants you have.
Smart Workplace technology like PlaceOS can power these service layers, and concierge style customer service to the shared workspace and extend it to a new area: community.
If you own the building and the precinct you already have the connections you need with restaurants, gyms, bars and retailers. No need to start from scratch. Existing tenants will be happy with the increased foot traffic and cross promotion opportunities, and future workplace tenants will be happy to receive community-leveraged discounts. These existing relationships are an invaluable head start.
We now have the technology to make this a reality and solve two problems in one. For workers, we can power personalised and local experiences, providing them what they need to successfully perform their roles. And for currently empty retail real estate, we can put these square metres to good use, providing additional value to real estate companies.
With both the growing desire for flexible work and the increasing shift away from in-store commerce showing no signs of slowing – perhaps now is the time to rethink how the best make use of those empty retail spaces?