2019, space odyssey: the game-changers ahead for Perth’s office scene
Space can be a funny thing. On one hand, it’s a totally finite concept with set dimensions and limitations. On the other, few commodities are as fluid when we opt to change our way of thinking.
I was reminded of this again recently when I moderated a Property Council of Australia event on the Future of Space.
Any idea who the biggest private office tenant in Manhattan, London and Washington is?
In eight years, we've grown to become the largest private occupier of office space in Manhattan.
— WeWork (@WeWork) September 18, 2018
As WeWork’s head of real estate for Australian and NZ Jonathan Kearins explained at the event, the co-working concept that once disrupted traditional office leasing is now being disrupted itself … and in their case, it has meant thinking far beyond tiny tech start-ups in need of a desk or two.
It’s not so much that WeWork has totally ditched the kind of tenants that provided the early impetus for co-working; more how far they’ve moved towards the top end of town.
According to WeWork, more than 20 per cent of the Fortune 500 are members – among them the likes of Microsoft, HSBC, Facebook and Starbucks. WeWork now has more than 1000 tenants with 1000 or more staff.
Globally, WeWork says that 70 per cent of its members have done business together. If you take that stat and throw it into the Perth business environment, you can see the obvious synergies in having your mid-tier accountancy firm down the hall from the graphic design company, which is in turn down the hall from a mining company.
From a flexibility standpoint, a mining company that might need 10 desks right now, 30 next year and only five the year after that, will have options far more suitable than a traditional lease.
The owners of office towers will also have some thinking to do. I’ve no doubt many of them will want WeWork to help them fill buildings, but it’s not necessarily going to be an easy sell.
In a modern business world, WeWork will want modern space. And there is plenty of C and D-grade stock in Perth that won’t hit the mark.
If you own a building like that – complete with corner offices, limited natural light and a low NABERS rating – you’re already out of the running for new government tenants and have some real thinking to do. Do you demolish (very expensive)? Turn into apartments (likewise)? Try to rebrand as student accommodation? Or get creative – like the high-rise St George’s Anglican Grammar School on William Street?
Such are the scenarios when a quarter of the world’s populations are millennials (born between 1981 and 1996) and younger than an awful lot of our office stock.
But those are the realities – and fluidities – of space.
The event’s other speaker was Selina Short, Ernst & Young’s Managing Partner, Real Estate and Construction.
As Selina explained, space is now a collection of services, rather than some fixed item you buy or rent. Increasingly, it will come with add-ons such as childcare, wellness centres and parcel delivery (in addition to the already common shared function and end-of-trip facilities).
In a time of unprecedented loneliness across the world, space is also becoming an amazing connector.
We won’t talk to each other at airports, in lifts, on public transport and at the shops. But throw us together in the same working space and communication becomes a natural thing again.
Just another reason WeWork is likely to find a niche when it arrives in Perth.
Ruth Callaghan is Cannings Purple’s chief innovation officer and a leading media strategist with more than 20 years’ experience in corporate communications in the property space and in journalism. Contact Ruth
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