The rise of mixed-use precincts
There’s no denying the future of the workplace is changing. With more millennials moving into the workforce and the shift from what we called work/life balance to a new blended work lifestyle, organisations are completely transforming to adapt to the needs of a multigenerational workforce the likes of which have not previously been experienced.
From remote working options, health & wellbeing considerations like in-house gyms, yoga rooms and healthcare services, right through to Wi-Fi enabled rooftops and even tertiary education options, attracting the right talent is no longer about offering the highest salary; it’s about offering a premium corporate lifestyle. This all contributes to a growing desire to be located within the hottest mixed-use precincts.
A change in urban design trends/strong
In the past, cities would be separated into very distinct precincts; CBDs filled with office space would be buzzing during the week but lie empty on weekends while designated entertainment areas would then come alive. But recently, there’s been a shift in the way cities are designed. Now, the newer developments boast a diverse mix of residential, retail, commercial and entertainment spaces all in the one area.
This new style of urban design creates a buzzing city precinct that’s ‘alive’ all hours of the day and night. Around the world, major city redevelopments are embracing this mixed-use trend. New York’s Hudson Yards, London’s Battersea Power Station, and even Sydney’s Barangaroo, have been developed into thriving precincts filled with eateries, shopping, residential and entertainment facilities, as well as corporate office space.
These lively new areas – almost mini CBDs in their own right – are a much more exciting place to work than standard office precincts. And as such, there’s a growing demand for employers to find office space within these new precincts as a way of attracting staff.
The demands of the workforce are shaping the office of the future
It is estimated that by 2025, roughly 75% of the global workforce will be millennials1 – a new generation of workers who value wellness, culture, and flexible working conditions over salary.
Millennial’s influence on the use of technology, their different approach to their careers, work and their workplace have significant impact on workplace culture and the way organisations think about their corporate real estate portfolio.
However, Knight Frank’s (Y)our Space2 global occupier survey shows that whilst millennials are influential it is essential not to overlook the importance of catering for the significant generational diversity in the contemporary workforce.
Because of this, the workplace of the future needs to have wide generational appeal and to provide an array of amenities such as open working spaces, collaboration space, outdoor working options, in-house wellness areas and the most cutting-edge technology to support a varied range of work styles.
In this disruptive digital age, the shape and focus of business is undergoing constant revision. As new sources of competitive advantage emerge, companies seek to mobilise and implement them quickly to get ahead of traditional competitors or enter into completely new markets.
This has implications for occupier’s workplace strategies where they locate, what building they occupy, how they fit out their space and the need for dynamic flexibility ensuring a greater appetite for co working space.
Representing the very latest thinking in workplace and placemaking is Melbourne Quarter – a massive 2.5-hectare redevelopment in the heart of Melbourne’s CBD. Filled with restaurants, cafes and retail amenities, the offices in Melbourne Quarter are second to none. The epitome of the workplace of the future, Melbourne Quarter will boast state-of-the-art, light filled offices, wellness centres and access to generous and varied open, and Wi-Fi enabled, green spaces; including a large Sky Park for those who prefer to work outdoors.
We spoke to Knight Frank’s Partner, Head of Office Leasing, Victoria, Hamish Sutherland, who is currently pre-leasing Melbourne Quarter Tower, about why Melbourne’s most innovative precinct is ticking all the boxes.
“There’s increasing demand from employers to offer the most contemporary workspaces in order to attract and retain the best talent. Melbourne Quarter has addressed the growing focus on wellness and the environment by including around 50% dedicated outdoor space in its design.
“There’s so much more to new developments than the traditional food and beverage offerings and end of trip facilities. Now it’s about providing a range of amenities within the immediate precinct to compliment the employees’ day to day requirements, whether that be yoga and meditation rooms or outdoor meeting spaces. There’s a real meshing of work and lifestyle which is what employees are looking for.
“Knight Frank is currently leasing Melbourne Quarter Tower – not due for completion until 2022 – and we’re experiencing substantial demand for the office space. This is without a doubt the premium opportunity in Melbourne for employers looking for a work environment that will support agility and growth, nurture wellness, and cultivate high performance.”
Knight Frank’s Partner, Head of Office Leasing, North Sydney, Giuseppe Ruberto described a similar concept currently being developed by the John Holland Group in Macquarie Park in Sydney’s north.
“The John Holland project, Macquarie Square, is an exciting new development in Macquarie Park that embraces the new mixed-use trend. Worlds apart from other office accommodation in the area, this will be an urban style multi-building precinct located over 3.2 hectares of land featuring a strong mix of premium office space, landscaped parklands and a multitude of cafes and eateries that are also open to the public.
“Macquarie Park isn’t somewhere you’d traditionally remain in or visit after business hours. But Macquarie Square, with its integrated amenity and lifestyle elements, is set to become a thriving precinct that remains alive in the evenings for workers, and on weekends for locals to enjoy. It’s going to completely transform Macquarie Park as we know it.”
Wellness and green spaces
In Queensland, Knight Frank’s Partner, Joint Head of Office Leasing, QLD, Mark McCann, explained that wellness is now as important as retail for employers.
“Employers still have a strong need for office space with F & B amenities, but over the past few years wellness and outdoor working have become just as important. We expect current and new developments in Brisbane over the coming years to include a strong mix of retail, wellness and expansive outdoor spaces which occupiers can utilise as ‘third space offerings’ for their staff and clients.
“Implementing the workplace of the future is becoming a critical platform for corporates and has significant impact in respect to achieving acceptable talent management levels (attraction and retention), greater corporate branding and image, increased collaboration leading to increased productivity and employee wellness amenities. Corporate occupiers are prepared to consider higher commercial parameters in order to achieve the various onsite amenities required to achieve this workplace of the future”
Flexible working, hot desking and high-tech solutions
Knight Frank’s Partner, Projects and Precincts, Office Leasing NSW, Jonathan Betts says that beyond amenities, employees are looking for more workplace flexibility.
“Another trend we’re seeing is the need to cater for diverse work styles. Employees want to be able to work in a variety of spaces and places; to get out of the office and work in a common area or sit in a co-working space for a day. Design and delivery of the office fit out is a significant component of this, however there are other factors to consider.”
New developments need to ensure there’s a wide range of work settings; touch down spots, private areas, communal desks, collaboration spaces, co-working options and so on. And of course, the building needs to be designed with the technological infrastructure to support that – there needs to
be Wi-Fi access and power points everywhere.
“Organisations talk about a war for talent and we see a situation now where when graduates have a choice of employers, an organisation’s building, its location and amenities will be a factor in their decision making. It has never been more important for employers to find office space that ticks all the boxes in terms of connectivity and location, flexibility and work/life balance. The real challenge is that there are now four generations in the workforce who all have different needs and drivers. So, catering for the requirements of millennials and not excluding the needs of other generations is very important.”
A building and workplace benefit hugely from being situated in a strategically well planned and delivered precinct, together these elements act as a talent magnet. This combination of internal and external amenity and facilities including coworking options support the contemporary work force.
This ensures more choice of work settings beyond those in the traditional tenancy are available.
The rise of mixed-use precincts, paired with the emerging multi-generational workforce, has completely transformed the traditional workspace. Knight Frank works globally on some of the world’s leading mixed-used precincts, advising developers and building owners looking to attract the highest quality tenants by incorporating all these elements into the building design to future proof the investment.
Tapping into this international expertise, we are able to partner with our clients to provide advice that is both locally expert and globally connected.
Feature image: Artist impression of Macquarie Square Marketplace (Credit: John Holland)
1What The Ideal Workplace Of The Future Looks Like, According To Millennials, Forbes, Mark Hall, 8 November 2017 https://www.forbes.com/sites/markhall/2017/11/08/what-the-ideal-workplace-of-the-future-looks-like-according-to-millennials/#77d788474228
2(Y)our Space Insights from the Global Workplace, Dr Lee Elliot, Global Head of Occupier Research, Knight Frank