JUNE - JULY 2022
How to solve the problem of slumping commercial property values by acting now Global reports highlight the risk to commercial property values based on the decrease in office occupancy over the past two years. It is clear this is a problem for New Zealand as well but is not unsolvable, says Studio DB Head of Research Pierre Ferrandon
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report in US based Bisnow claims that US$1.1 trillion in American office properties are at risk of complete obsolescence. This represents about 30 percent of US office building inventory, and according to the study, another 40 percent is “marginal”, with capital expenditure necessary to raise many properties’ energy efficiency and health standards. There is a way forward for New Zealand that protects current investment and future-proofs the sector – one that builds on the global decarbonisation movement, local innovation and 54 propertyandbuild.com
a fleshed-out hybrid work model. Landlords and business leaders benefit from the adoption of workplace strategies that focus on efficiencies and value.
Within two years from the start of 2020, building utilisation – when a space is actively used -- dropped from 52 percent before the pandemic to as low as 20 percent for some. Alongside
The top companies to work for – globally and locally – focus heavily on the workplace as a driver of engagement Experience-led real estate
Our situation is as vulnerable, relatively speaking, as that outlined in the US.
project budgeting, this is the top challenge for businesses. With around $1 billion per year paid in commercial
rent by companies in Auckland alone, there is a need to significantly improve utilisation for occupiers while protecting the overall economic benefit of returns to property owners. Doing so in New Zealand will bring us in line with a trend towards “experience-led” real estate. This acknowledges that the underlying issue that is driving devaluation is that employees now have real choice about their workspaces and are reluctant to travel to a workplace that provides an experience that is inferior to what they have at home. This is where investment
