Workspace Flexibility To Shape Future Office Markets

Strengthening demand for office space with flexible sizing options has underpinned a lease deal at Hickson Road in the Sydney CBD.

CBRE Office Services Associate Director Ben Cohen said tenants were increasingly attracted to buildings that offered them the ability to expand their floor space to support future head count growth.

"Some landlords are providing flexibility for growth by allowing tenants to have first right of refusal over additional space in office buildings," Mr Cohen said.

At 36 Hickson Road in the Sydney CBD, leading international design firm Gensler was granted first right of refusal on the 130 sqm office space above its current tenancy.

"Due to Gensler's strong covenant and brand profile, the landlord provided further flexibility by agreeing to a shorter than usual initial term of two years, with a one year option," Mr Cohen said.

"36 Hickson Road's boutique positioning matched Gensler's corporate profile and once the firm's staff head count stabilises, there is potential for a long term commitment a the building," he said.

Mr Cohen said the rise of communal meeting spaces was another emerging trend, with tenants opting to pay on a per-use basis opposed to having internal space within their tenancy.

"Serviced office companies have been the traditional space solution providers for tenants with future growth plans and have been able to offer shorter term leases, as well as additional pay-per-use meeting space," Mr Cohen said, citing new co-working start-up in the USA WeWork as an offshore example.

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