Office investors in Asia Pacific need to ensure their properties are of top standard to attract occupiers competing for talent in the region, according to executives from LaSalle Investment Management, Brookfield Asset Management, Benoy and Yardi speaking at an industry forum today.
Although utilisation rates for offices in Asia Pacific are much higher than in other parts of the world, hybrid working is still widespread in the region and companies are using premium offices as tools to bring employees back to the office, George Goh, head of acquisitions and asset management for Southeast Asia at LaSalle, said in a panel discussion at the Mingtiandi Office Strategies Forum.
“The flight to quality trend is here to stay,” the Singapore-based executive said. “Multinational companies are demanding higher and higher standards in terms of sustainability, accessibility, flexibility and amenities for wellness, building technology, safety, security and health.”
Goh was speaking at the MTD TV panel, which was sponsored by Yardi, after LaSalle, together with its joint venture partner, Singapore private equity shop TE Capital, began clearing the site for Solitaire on Cecil, a prime office project in the city-state’s central business district which achieved record prices earlier this year as it sold out its strata-titled space.
Landlords Compete for Top Tenants
The ongoing “war for talent” has also fueled demand for quality offices in Australia, where unemployment has plunged to a multi-decade low, according to Leonie Wilkinson, senior vice president for portfolio management at Brookfield Asset Management, who was speaking in the same panel.
“Organisations will be very, very thoughtful about what their workplace will look like and design something to attract their people to come into the office that will have all of the elements (such as) collaborative space and very high amenity, as opposed to the smaller tenants (who are) genuinely attracted to that turnkey space where they can come in and just get working very quickly,” she said.
“Well-capitalised landlords that can work to meet the differing demands of different types of tenants are going to be the best positioned in the market,” she added.
In April, Canada-based asset management giant Brookfield teamed up with Cbus Property, the development arm of Australian superannuation fund CBUS, to establish a development joint venture for a premium grade office tower in Perth’s Elizabeth Quay. Earlier this year Brookfield Sydney Place in the New South Wales capital was recognised as the development of the year by the Property Council of Australia.
Complexity and Flexibility
With the panellists concurring that cost concerns remain paramount for office tenants at the same time that companies demand meeting spaces, co-working centres, end of trip facilities and wellness features, landlords need to be prepared to offer more options and amenities to win business from global firms.
“Flexibility is key and the ability to offer a much wider variety of occupancy solutions – everything from including that flex space in the mix – is really quite important to helping occupants find the right balance in their space and in the equation for their occupancy cost,” said Bernie Devine, senior regional director for Asia Pacific at Yardi.
With his company providing management tools to some of world’s largest property portfolio owners, Devine advised that building operators need to be prepared to offer the right type of solutions to occupiers as companies requirements evolve as they renew leases post-pandemic.,
“That brings a lot more complexity into what landlords are having to deal with in terms of business process,” Devine said.
Hybrid Here to Stay
Following the pandemic occupiers are faced with changed expectations from their staff regarding office attendance, but can also take the opportunity to rethink how they use space within their offices, according to Terence Seah, director and head of Hong Kong, Singapore and Shenzhen at global design firm Benoy.
Facing fierce competition for talent in Singapore Seah sees flexibility on office attendance as necessary for recruiting and retaining staff, but also sees advantages in using space in ways that conform more closely to actual work requirements.
“What was really clear (post-pandemic) was hybrid was here to stay so we implemented an agile working policy where staff can work up to two days at home, and that gave us an opportunity to rethink a little bit about allocation of space,” Seah said.
After surveying their team, Benoy’s management found that having common areas in the office for lunch gatherings or coffee breaks boosted staff satisfaction. With the company’s process relying heavily on teamwork, 40 percent of Benoy’s new office is devoted to shared spaces for collaboration, relaxation or interaction, while fitting into a footprint 20 percent smaller than its previous workplace.
The design firm’s new office also incorporates a green wall as part of an environment hosting more than 500 green and flowering plants which also makes space for evening yoga and high intensity interval training classes.
“It’s really almost like bringing a little bit of the home into the office so that people are really excited to work and do the things they need to do for the day,” Seah added.
November in Singapore
The future of the office panel concluded the third annual office forum on MTD TV, with the Mingtiandi team heading to Singapore next month for its annual Singapore Focus Forum.
Following last year’s successful program, the second annual Singapore forum will be held on 14 November at the Conrad Centennial hotel, with more than 20 industry leaders speaking at the event, including:
- Alessandro Fiascaris, Head of Asia Pacific, Oxford Properties
- George Agethen, Co-Head of Asia Pacific, Ivanhoe Cambridge
- Sangwook Kang, Director, KIC
- Fan Li, Managing Director, Singapore, Warburg Pincus
- Imelda Tham, Managing Director, Investments, Gaw Capital
- Andrew Lee, Director, Head of Investments, Singapore and Southeast Asia, BlackRock
- Suchad Chiaranussati, Founder and Chairman, SC Capital Partners
- Sarah Winbur, Senior Portfolio Manager, APG Asset Management
More than 220 senior executives are expected to attend this year’s event, with tickets still available here.