Australian Newsagency Blog

A blog on issues affecting Australia's newsagents, media and small business generally.

The growing empty office space question – for high street retailers

Mark Fletcher
April 5th, 2021 · No Comments

Discussions about empty office space and empty CBDs are growing, which is good. In the US, the conversation is more advanced than here in Australia, with Twitter, parts of Microsoft, Pinterest and plenty of other companies permanently adopting the work from home model or, at least, a far more decentralised model, it’s no wonder property developers are listening and engaging.

Here in Australia we are seeing insurance companies, banks and other usually centralised businesses adopting work from home more.

Scott Galloway has written about this recently. His piece, We (might) Work is well worth reading if the topic of the future location of office work interests you. It includes this…

The wholesale abandonment of office space has been among the most striking fallouts of the pandemic, and it will have profound effects on the way we live and work, long after the virus has been tamed. In New York, new office space is coming on the market 59 percent leased, down from 74 percent pre-Covid. San Francisco went from its lowest-ever office vacancy rate to its highest in the same year, and office rents are set to decline by 15 percent. The worst may be yet to come. Analysts predict that commercial vacancy rates will rise from 17.1 percent in 2020 to 19.4 percent in 2021, besting the previous high of 17.6 percent in 2010. And, as $430 billion in commercial and multifamily real estate debt matures in 2021, lenders will be forced to reconcile the effect of the pandemic on their investments.

Why does this matter to newsagents? How, where and when people work plays a role in the performance of high street retail and with the bulk of our channel on the high street, a decentralised workforce matters to us. It can play into what we stock and the services we offer.

There are plenty in our channel who see the work from home moves in 2020 as an aberration, they expect things to get back to normal. I am in the camp of what is normal anyway … every day, / week / months is a progression from the last, there will be no getting back to normal. Online, more people working regionally, less office centric CBDs … these are all connected issues, issues that the pandemic has sped up, issues that impact retail, issues from which we can benefit.

I keep reading up on this topic of office space use overseas as I think it helps to inform decisions we can make today, for our future.

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Category: newsagency of the future

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