The latest research from Colliers showcases that the demand for flexible office working has increased over the past 12 months, with the expansion of key industry players as well as local operators providing customers with a wide variety of solutions.
Chris Dibble, Director of Strategic Advisory at Colliers, says flex office space continues to prove a popular option for businesses that do not need the long-term fixed costs associated with more traditional office space leasing.
“From small beginnings around 15 years ago in New Zealand, there is now over 80,000sq m of dedicated flex office working space that we are monitoring in the five major locations of Auckland, Hamilton, Tauranga, Wellington, and Christchurch," Dibble says.
“While growth in the sector continues, the penetration rate remains low, often at only around 2 per cent to 5 per cent of traditional office space in main and provincial centres across New Zealand.
Start your property search
"Changes to office workplace dynamics have meant that businesses are looking for alternative ways of leasing office space to maintain as much flexibility as possible and free up much-needed capital to deploy into their business.
“The more recent changing economic landscape and uncertainty among businesses regarding how much space to commit to over extended periods also provides significant advantages for smaller firms or business departments exploring specific projects, undertaking pilots, or testing new markets."
Dibble says there has also been a growing trend of owners and developers or large office buildings looking to provide flex office space as part of an overall office offering.
“This provides flexibility for businesses that may be uncertain about their specific office requirements over the long-term but provides the business the opportunity to expand and contract as required without long-term costs.”
Ian Little, Associate Director of Research at Colliers, notes that while growth is occurring, opening a collaborative workspace premises requires careful planning.
“Research shows a myriad of factors such as ease of access from well-populated locations, quality of space, flexibility and diversity in types of space offered, additional services on offer, security and technology, and a high level of amenity nearby are seemingly the key ingredients of a successful operation,” Little says.
“These factors are not limiting, and in fact enable a variety of options in space to rent or lease across many locations, from virtual office space to physical office spaces.
“The larger markets of Auckland and Wellington provide the greater variety to cater to the level of demand and breadth of services for the largest populated New Zealand cities. Christchurch is also becoming a key operator destination, given it is a major gateway to the South Island.
“Smaller regional and provincial markets continue to service a smaller category of clients, limiting the options on offer, but still providing a much-needed service that connects people and ideas and fosters business growth.”
Dibble notes that as a result of the variety of spaces, there is also a variety in rental rates achieved.
“Daily rates of around $25 to $50 are relatively similar across the country. However, there is greater variation in the three-day to five-day casual and hotdesking rates, which typically range from around $200 to $700. Permanent/fixed desk rates and pricing for dedicated office space vary considerably, not only by region but also by operator within the same region, reflecting the quality and location of the offering and the additional services, benefits, networks, and community provided,” he says.
Lauren Joyce, General Manager of Generator, New Zealand's leading provider of flexible workplaces, says it has been a record few months for the business, and more growth is on the cards.
"Across our sites in Auckland we continue to see high occupancy and strong levels of enquiry. Global and large local businesses are also recognising the benefit that Generator can provide in regard to large, fully fitted-out managed office suite options, freeing up their balance sheet in an uncertain economic time and where fit-out and office management is all taken care of,” Joyce says.
“Our Generator office and events business is thriving, we are nearing 100 per cent occupancy in some of our Auckland sites, which underpins the opportunity to explore growth opportunities across the city.
“It has already been a year since we opened our first Wellington location at 30 Waring Taylor Street. With over 90 per cent occupancy and three industry awards, including PCNZ's Heritage and Adaptive Reuse and the Commercial Office of the Year Award.
“The logical next step for us was to open additional premises within the Bowen Campus development, which anchors the Government precinct in a stunning new development. Here we have incorporated large suites to support the trend toward bigger businesses and global companies seeking the benefit of flexible terms with access to state-of-the-art AV and meeting amenity.
“The positive metrics in the sector position us well for further business expansion. We are receiving a steady flow of enquiries from existing and new members for more spaces across New Zealand and like many of our members, we are always exploring new markets and opportunities.”
- Article supplied by Colliers
