The rise of ‘Workplace Communities’

By DLA Partner, Davida Dunphy

Real estate has been an integral driver of the global economy, but now it is having confront changing times. Uncertain business confidence, technology redefining space requirements and a strained construction market.

To sustain its growth, real estate must work hard, not only through achieving optimal rental returns, but also by staying fit for purpose. In New Zealand, we at DLA Piper think we have seen the real estate future, and we’re moving – literally – with the times. Our new premises will be at Commercial Bay in Auckland. Commercial Bay is set to open its doors officially in March 2020; it’s a big Precinct Properties build, an example of what is called ‘mixed use development’, a term that doesn’t do it entire justice.

Commercial Bay, I believe, is the future, certainly the high-density urban future. It’s a social vision, necessitated by practical concerns. People who live or work (or both) in a CBD now need much more flexibility in their work/life balance.

Commercial Bay will bring together a world-class office environment: public transport, international quality retail, public spaces, a luxury hotel and hospitality environments into one connected location, in the heart of Auckland's waterfront precinct. The people who work there won’t all be content to commute in from the suburbs in the traditional way and leave for home when the work’s done.

Millennials will comprise 75% of the global workforce by 2025, says Deloitte. They are already influencing office design. Millennials will soon enough become society’s chief decision-makers. They are looking for workplaces and spaces that encourage collaboration and social interaction, along with seamless digital connectivity (we all want that). They also – crucially – seek not just a balance of work and life, but a blend of the two.

Key trends for workplace communities:

Worker Centric - 83% of Commercial Bay's pre-committed tenants surveyed want to be part of a community of interest within the precinct, according to a PWC survey. That’s despite many of them belonging in large organisations with active social networks. ‘Experience workplace’ is becoming as important as ‘experience retail’. More than 25% of New Zealand millennials would move to a smaller, less well-known company for a better work environment; that was the finding of a 2017 CBRE millennials report.

Retail, leisure and shared space therefore should be shaped for the workers within the development. All businesses (big or small) can then offer a wider community to their workers, to attract and retain the best talent, and create opportunities.

Ready-made customers - Commercial Bay's retail is supported by 10,000+ customers working directly above, promising a dedicated digital platform connecting workers to events, special deals and groups for sport, social and professional interests. ‘Digital connectivity’ is a phrase on everyone’s lips, but physical connectivity is just as vital for humans. ‘Actual space’ retail, for example, is still important. Statistics show 50% of online sales happen within seven days of visiting a store (a Quantium survey commissioned by Scentre Group), and Shopping Centre News revealed this year that 83% of a store’s customers are lost to a brand when a store closes. Shops are not going away, and Commercial Bay brings them closer, for convenience.

Flexibility is the new mantra - Buildings need to be much more flexible now, along with the people in them. Having access to lounges, meeting suites and auditoriums for events, training and seminars which can be rented by the hour enable businesses to rent whatever essential core space is needed, and bolt on additional ‘flex’ or ‘swing’ space as required. You can imagine the extra collaboration and networking that can flow on from that; it is far more fluid than traditional working environments with everyone in their own silos. And flexible space can physically flex. On Auckland’s North Shore, Smales Farm’s co-working B:HIVE facility is able to change partitioning overnight to meet instant space demand.

The growth of flexible workspaces in New Zealand has been limited by premium CBD offices operating at close to 100% occupancy. Despite this, the sector has doubled in the last three years, and is expected to double again in the next five. 65% of enterprise companies in the US plan to incorporate coworking into their portfolios by 2020; 30% of the UK's corporate real estate is predicted to be flexible by 2030; Europe's flexible office space will grow 30% year-on-year over the next five years. Traditional CBD occupiers will start moving out of a CBD if these new sorts of options are not offered.

The Importance of Food - Commercial Bay has dedicated 25% of its retail precinct to food and beverage, because of the continued spending growth in this area, and to make sure the customer base stays on site. Silvia Park also follows this trend with The Grove dining district and a further café/dining precinct being developed as part of the Galleria expansion. 40% of shopping centre visitors base their choice of centre primarily on dining options available, with 12% more sales being generated from those who eat.

24/7 - Working, living and playing in one location allows businesses to take advantage of lifestyle. Lobbies become more like co-working members’ lounges. 9-5 weekdays morph into vibrant mixed-use environments attracting evening/weekend use through introducing a diverse range of users and enthusing a building’s workers with events and activities. Every Auckland mayor has aspirations for the city becoming truly international. This is part of that goal, because international cities give you lifestyle choices, not just choices of jobs.

Smart Solutions – Imagine these options where you work: wellness facilities, cycle workshops, personal shopping services. If you’re still driving in five or ten years time, how about parking underneath the building with a barrier arm that can recognise your licence plate and text you your space for the day, or for as many hours as you require. This allows carparks/storage to be used more efficiently, reduces the space required, and opens up further retail, hotel or public use potential.

People mean data – Without any personal prying and spying, a building’s community can usefully be measured and monitored for continuous improvement. Digital platforms can be integrated into the building to monitor its performance or measure demand. Is this conference room getting enough use? Or too much use? Are people from different firms getting to know one another? Shall we make spaces friendlier so that they do? If they aren’t using this hallway, could it become an extra coffee kitchen? The aim is to satisfy and excite an increasingly demanding workforce.

This is not a nice description of the possible future for working; this is the right prescription for right now. New Zealanders are used to spreading themselves out, but increasingly a new generation will follow the lead from overseas and centralise their working and socialising. It’s a lot easier to create a community, and have people’s needs catered for, in a project like Commercial Bay. And you get a view of the harbour!

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