The office market in Australia, especially in Sydney and Melbourne, is witnessing a change in landlord behaviour as they adjust to meet tenants’ needs for flexible, up to the minute office space.
‘Today’s younger generations of workers are expecting modern, comfortable premises which offer the latest in digital technology services and facilities, and are key drivers for this change.’
An aspect not commonly focused on are the needs of Real Estate Investment Trusts (REITs). A property industry investment development, REITs are very popular for their income appeal and own and operate income-producing real estate including office and apartment buildings, warehouses, hospitals, shopping centres and hotels.
As at March 2019, the top six Australian REITs had a market capitalisation of around US$60 billion (IG Markets Limited) from the largest – Goodman Group – to the smallest two – Vicinity Centres and Stockland.
Co-working spaces are helping expand REIT portfolios, and landlords who are flexible with regard to lease terms and providing updated, smart modern offices to today’s tenants are helping contribute to good REIT returns.
Catering for today’s workplace talent, and aiding the attraction and retention of staff, these updated co-working environments help real estate agents and landlords interest successful start-ups, aka ‘unicorns’, in the technology and other fast growing digital business areas.
‘This is because these businesses are looking for buildings just like them – smart, connected and able to communicate. Co-working spaces which are updated and offer BYOD (bring your own device) facilities, lifts, parking, meeting rooms and wellness spaces are exactly what is required.’
REITs are looking for long-term income producing assets, and landlords who provide options for tenants to better connect with, customise and more efficiently utilise buildings and their amenities not only improve the leas-ability of buildings but also support REIT income-producing needs.
