The changing shape and structure of the office exemplified by the "Experts"

The best way to see the revolution in office space is to examine what the experts are doing. In other words, what are the tenant advisors doing with their office space?

Tenant CS, with offices in Sydney and Melbourne created enormous savings by being flexible on all criteria except quality.

In Sydney, they occupied 450sqm @$350,000 pa in a B-grade building and went to market to find larger, better quality space at a distressed rent. Fast forward to early 2023, and Tenant CS secured 700 sqm of B+ grade, fitted out office space in Martin Place at $200,000 per annum. It was a sublease with only 2 years to go, which was no problem as the company is prepared to move every 2 years to save $750,000 over 5 years. So far, some of the savings have been put into food and beverages for staff plus various staff experiences such as harbor cruises, restaurant lunches and other fun team-building activities.

In Melbourne, Tenant CS were in The Hub co working and were paying circa $5,000 per month for a small space accommodating 5 people. Fast forward to the middle of 2023 and a 2 year lease of 150sqm fitted out office was secured for $5,000 per month, the same as co working, but 10x the size. What's more, the Hub farewelled Tenant CS with a $500 "exit fee!"

What are the lessons?

1. If tenants are flexible, huge savings are possible, particularly with sub lease with less than 3 years to run.
2. Co working has become more expensive than traditional offices.
3. Don't be afraid to make a silly offer on rent. Most tenants (guided by landlord agents), make offers at market levels rather than below market offers. Keep in mind that you are buying a distressed product!

Looking to take advantage of market conditions? Copycats welcome. Contact the Tenant CS team to see how we can help you.

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