Office Space

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<img src="https://counter.theconversation.edu.au/content/64734/count.gif" alt="The Conversation" width="1" height="1">
GUST OBSERVER
If we all work side by side in an open-plan office or “hot desk”, moving from place to place, it’s sure to increase collaboration!
It turns out that may be wrong. If you don’t have your own space, perhaps you are better off working remotely with your cat for company.
Our research found that in shared working spaces there were increases in “employee social liabilities”; distractions, uncooperativeness, distrust and negative relationships. More surprisingly, both co-worker friendships and perceptions of supervisor support actually worsened.
Although prior researchers have claimed shared work spaces can improve social support, communication and cooperation, our results indicated that co-worker friendships are of the lowest quality in hot-desking and open-plan arrangements, when compared to those with their own offices or who share offices with just one or two others.
They are significantly worse when compared to those who mainly work at home or on the road. It is possible that these shared offices may increase employees’ use of coping strategies such as withdrawal and create a less friendly environment in a team.
As part of our research we surveyed 1,000 working Australians. We asked them whether they shared their office space with others, what sort of co-worker friendships and supervisor support they had, in addition to any negative relationships (such as lack of cooperation or distrust).
Shared environments did not improve co-worker friendships and, in addition, were associated with perceptions of less supportive supervision. The finding may be because employees who receive either too much monitoring or only informal supervision, perceive their supervision to be of lower quality than those who have dedicated supervision meetings.
It could also be that, as employees become more irritated, suspicious and withdrawn in a shared workplace, their relationships with their supervisors and colleagues deteriorate.
Other research also supports the idea that the benefits associated with shared spaces are aren’t all they are cracked up to be. Instead, it showed that cooperation became less pleasant and information flow did not change in a shared office space.
This is not great news for employees in an age where shared space and hot-desking is increasing alongside the use of mobile technology like laptops, smartphones and tablets. This, together with the high cost of office space, has brought about a desire to use physical office space more flexibly.
So, if this trend towards shared space is not likely to be reversed, how do employees survive?
Surviving a shared office space
If you can have your own office, share with just one or two others, or work from home, these are the best situations for workers we studied. However, we’re not all that lucky.
One way to combat visual distractions from nearby co-workers can be to use panels, book shelves, or “green walls” of plants. Noise from the office can be cancelled out with headphones.
However, these interventions will depend on whether they are suited to your job, workplace or your fellow employees. One option can be to create a mix.
Researchers Pitt and Bennett describe a large office redesigned to include not only hot-desking, but also “touchdown areas” (free desks to allow quick access to information), “bookable offices” (rooms that can be booked in advance), “collaborative workspaces” (for group work, possibly with teleconferencing capabilities) and finally “break-out workspaces” (relaxed couches and low tables for spontaneous, informal collaborative work).
We are not suggesting workers should be afforded unlimited privacy and solitude. Some spontaneous interaction is needed for many types of activity-based work to succeed. Too much and the distractions will outweigh any potential collaborative benefits. Too little and the benefits are not evident.
Rachel Morrison is senior lecturer, Business School, Auckland University of Technology and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/rachel-morrison-296325" target="_blank">here</a>.
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Get out of my face! We're more antisocial in a shared office space

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Office leasing levels nationally have increased 13% when compared to the same time last year with overall square meter space up 22%.
Demand for office space is highest in New South Wales with 112,937 sqm leased so far this year, up from 64,629 sqm recorded in the first half of 2014. 
Figures from Colliers International show interest in office space sized between 1,000sqm and 3,000sqm around Australia increased 31% from Q2 2004 to Q2 2015, with demand up 25% from Q1 2005 to Q2 2015.
Colliers International national director of office leasing, Cameron Williams, said larger firms are driving demand for office accommodation in 2015 compared to 2014. when smaller space was in strong demand.
“Core premium remains the most challenged market however, as we had anticipated, a flight to quality is occurring that will result in significant commitment within the core premium market during the second half of 2015," Mr Williams said.
“In 2014, we saw the government sector dominating as they put large requirements into the market. However, as we move into the second half of 2015 we are seeing business services, communications and finance catching up and dominating both in enquiry levels and leasing deals being negotiated.
 “At the smaller end of the market there has been a lot of activity from Asian investment companies that have a preference to be located in Sydney’s midtown. This growth is naturally having a positive impact on net absorption and lessors are becoming more confident."
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Sydney surges into second half as office leasing deals spike

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Demand for high quality office space and improvements in occupancy levels helped Dexus Property Group lift its Funds from Operations and distributions in the 2015 financial year. 
The group, which has Australia’s largest prime office portfolio and a $9.6 billion funds management business, reported FFO increased to $544.5 million from $446.6 million a year earlier. This represented a per security increase of 9.3% to 59.5 cents. 
Distribution per security also increased 9.3% to 41.04 cents, in line with the group’s upgraded guidance provided in February. 
Chief executive Darren Steinberg said the business was in “great shape”. 
“Income from our property portfolio is underpinned by high occupancy and fixed rental increases and we expect to see strong valuation uplift across our portfolio with tightening of a further 25 to 50 basis points of [capitalisation] rates over the next 12 months as a result of recent transactional activity,” Steinberg said.
Occupancy rates across the portfolio rose to 95.3% and leasing incentives fell. 
Dexus reported stabilising markets in Sydney, where half of the office buildings it owns are located, and in Melbourne. However, vacancy rates remained well above historical averages in Brisbane and Perth. 
Despite the high vacancy rates, the group was attracted to the long-term growth prospects of Brisbane and Queensland more broadly. 
Executive general manager Ross Du Vernet said the group was excited about its acquisition of Waterfront Place in Brisbane, which it bought for $635 million, representing a 6.9% capitalisation rate. The sale settles in October 2015. 
“Brisbane office represents good relative value when we compare it to office markets nationally. Foreign capital is less active and we do think the 100 basis point discount applied to prime average capitalisation rates does overstate the risk in that market,” Du Vernet said.
Dexus issued guidance for FFO per security growth of 5.5 to 6% for the 2016 financial year with FFO from the underlying business expected to grow by 3 to 3.5%. 
It forecast distribution per security growth of 5.5 to 6%. 
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Office space demand drives Dexus Property Group results

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High demand for office space in Sydney and Melbourne is being quickly met, with the Brisbane market weakening and Perth and Canberra recording negative demand.
Underpinning the demand is the property and business services sector, which includes computer system design, engineering, technical services and architectural services.
BIS Shrapnel Senior Project Manager Maria Lee said that there has been a marked improvement in underlying demand since the depths of 2013 and that net absorption—which is already positive—will go higher. 
“We shouldn’t use recent history as a benchmark of what’s to come over the next few years," Ms Lee said.
"As demand comes through, the company forecasts higher rents will follow. But it’s a two speed economy and there is considerable variation city by city."
According to BIS Shrapnel, office space in Sydney and Melbourne accounted for 860,000 square meters of demand.
 
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Sydney, Melbourne hungry for office space: BIS Shrapnel

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Technology-related businesses and start-ups are driving the current demand for office space nationally in the sub-500sqm category, with average lease enquiries under 1,000sqm growing as a percentage of total leases as well.
According to the Second Half 2015 Research and Forecast Report from Colliers an influx of part-floor tenants are ready to come into the market as the sub-500sqm leases expire,with owners changing both leasing and development strategies as a result.
Nerida Conisbee, Colliers International national director of research said this is more a cyclical element given the long leases that large corporations typically take, however there are a number of structural issues also occurring. 
"The first is that there has been significant growth in small-to-medium size enterprises looking for space," she said.
“Average lease enquiry levels in the sub-1,000sqm category have grown as a percentage of total leases. In 2009, it amounted to 71% of total deals. This has grown consistently to currently account for 83%.
“We expect to see a wave of part-floor users enter the market over the next two years as a large number of these leases expire. The number is expected to be much higher than single floor and multi floor users over the next two years. We therefore expect that it will not just be new tenants entering the market that are after smaller tenancies, but also existing users looking for new space.”
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Simon Hunt, Colliers International managing director of office leasing, said Investa recently leased a whole floor at 120 Collins Street and are looking into splitting a further floor.
“Our latest Colliers International Demand Index found 55% of the companies wanting office space in Sydney alone this year have sought less than 500sqm, and this is being experienced across the board for premium, A and B Grade tenancies,” he said.
"Tenants were continuing to place a greater focus on location. In both the Sydney and Melbourne CBDs there is a current centralisation of tenants taking place.
“In Sydney CBD, the differential is not as significant however we are seeing even greater movement of tenants from metro markets… historically, Melbourne CBD has not had much movement of tenants between CBD and metro locations with most tenants preferring to stay in either location. This has changed over the past 12 months, where the cost of being based in the Melbourne CBD has dropped significantly compared to metropolitan markets.”
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Start-ups, tech companies driving sub-500sqm office demand: Colliers

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A 243 square metre three level office block on Melbourne's inner fringe is up for auction with expectations expected to exceed $800,000
127 Chestnut Street Cremorne goes under the Teska Carson hammer Thursday August 13 on site, less then two kilometres from the CBD. 
The property has a west facing balcony, and four undercover car spaces. It is zoned Commercial 2 and has 7.5 metres of street frontage.
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$800,000 plus hopes for Melbourne inner fringe office

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The valuation firm Herron Todd White has issued its latest property clock for the office market - a simple broad brush means to suggest where commercial property office markets are - and what direction prices are moving in.
The valuation firm has included capital and regional cities on the October 2015 property clock for price direction.
Melbourne and Tamworth office space is at the peak of the cycle.
<a href="/images/2015/10/12/Screen%20Shot%202015-10-12%20at%204.43.08%20PM.png" target="_blank">Click to enlarge</a><a href="/images/2015/10/07/Screen%20Shot%202015-10-07%20at%209.50.31%20AM.png" target="_blank"> </a>
For more information, <a href="https://www.htw.com.au/" target="_blank">click here</a>.
 
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Melbourne, Tamworth office space at peak: Herron Todd White

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The NSW government has sold off a commercial office building in the heart of Blacktown for $17.15 million.
Blacktown City Council has been selected as the preferred buyer for the six-story building at 22 Main Street, after an open market tender.
The building will be leased back to the state government to meet the occupancy needs of government tenants, that includes the Department of Education, WorkCover NSW and Juvenile Justice.
“The sale and leaseback of this property not only releases capital upfront to reinvest into infrastructure and services for the community, it also maintains government jobs in Blacktown’s CBD,” said Brett Newman, the CEO of Government Property NSW, while announcing the sale.
Newman said the sale aligns with the principles outlined in the Property Asset Utilisation Taskforce (PAUT) report, which state that government should only own real property assets to support core service delivery.
The sale of 22 Main Street was managed by CBRE.
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NSW government's sale of Blacktown building fetches $17.5 million

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A tenanted three-level office tower in the heart of West Perth is for sale through Colliers International.
Interest in the Havelock Street property is anticipated to be strong.
The 1,131sq m property features a 1288sq m office building with secure parking for 27 cars and a strong net income of nearly $430,000 per annum.
The property is close to transport routes along Hay Street.
Colliers International Director Investment Services Nicholas Agapitos said 57 Havelock Street offered large 590sq m floor plates around a central service core, with banks of windows that ensured good natural light throughout the property.
While the building is in excellent condition, zoning also allows for the site to have other uses, including residential development.
“This property will appeal to a lot of owner-occupiers who will be able to take advantage of its position in West Perth,” Agapitos said.
“It is not often properties in this precinct come on to the market and we expect strong interest.”
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Plum West Perth property heads to market

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Canberra's Franklin’s recently saw sales of eight mixed-use commercial suites at 227 Flemington Road, minutes from the CBD.
The sale of the ground floor commercial spaces at the Aamira development were brokered through CBRE’s Mark Nicholls and Patrick Sammon on behalf of developer Taofei (Australia) International Pty Ltd.
The units, between 129sqm and 190sqm, sold at premium rates, said Nicholls, attributing it to the strong commercial demand for sites in the Franklin area.
“The majority of purchasers were owner-occupiers, however, a couple of units were purchased by investors. This demonstrates the increasing confidence buyers have in the long term investment potential of the Canberra commercial market, especially those situated on the proposed Capital Metro route.”
The units were offered to the market individually or combined, catering for a variety of commercial office, restaurant and retail businesses, added Sammon.
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