Office fitouts are changing in response to tenant demands, with a strong emphasis on green spaces.
The idea that the office is an extension of the home is more relevant today than ever.
As many people embrace hybrid work, the configuration of offices has changed to make them more social spaces.
Tenants require more breakout areas, quiet rooms, greenery, and coffee and food in the office, according to a recent study by Hassell.
The architecture firm’s annual workplace survey identified a global preference for calmer workspaces characterised by flexibility, freedom and fresh air.
While the study identified a gap between tenants’ wish lists and current office layouts, there are several examples of recent office refurbishments in Perth that meet workers’ changing preferences.
For Arup, the fitout of the company’s new offices on levels two, three and four of GDI Property Group’s hybrid timber tower WS2 aligned with the principles highlighted in the study.
A winter garden – an enclosed space where staff can eat their lunch or work away from their desks surrounded by greenery – is a prominent feature of the building’s second floor.
The space is designed so the temperature is cooler in winter and warmer in summer, effectively matching the environment outside the building.
Arup Perth office leader Lewis Macdonald explained that connection to nature was a key driver behind the company’s office design.
“Through the scoping process we engaged the staff and Peter Farmer Design … to come up with themes that really [are] design principles for the office,” Mr Macdonald said.
“A really strong one from both of those stakeholder groups was connection to nature.
“Our thinking about that started with our selection of the building, and then with selecting where we were in the building.”
Arup had its sights on the top floor of WS2 but opted to situate itself lower in the building to be closer to the tree canopy outside.
“That’s what started to shape us having the winter garden here, and it’s what shaped us being [here] ... just above or just in the treetops, like a treehouse,” Mr Macdonald said.
Designed by Hames Sharley, Arup’s offices are divided into different areas depending on the task at hand, with numerous quiet areas for staff.
Propertysolve director David Barnes acted as Arup’s tenant representative when it moved from its former offices at Exchange Tower.
Mr Barnes said separate zones for different tasks were high on the list of tenant demands.
“The mix of spaces and tenant amenities are counting for a lot more now; having different spaces to work and sub environments within the office space,” he said.
Law firm MinterEllison’s new Perth office has been designed with its employees top-of-mind. Photo: Dion Robeson
Taking risks
However, as Hassell WA principal Sophie Bond explained, not all design outcomes needed to be costly.
“A lot of the principles [we’ve] talked about in terms of planning drivers, flipping the office inside out, giving natural light back to your people; they’re not the moves that actually cost money,” Ms Bond told Business News.
She said there was a proven link between staff wellbeing and performance, which prompted businesses to invest in initiatives their people found important.
“That’s where you can have really good values-based conversations with clients around really investing in their people, which is a lovely thing to be putting first,” Ms Bond said.
Hassell’s design of law firm MinterEllison’s new offices in Brookfield’s One The Esplanade demonstrates the idea of turning the office inside out, with the spaces normally designated for clients given to workers via a collaborative area facing the river.
Hassell head of design Dan Cox said the MinterEllison fitout reflected a growing trend for spaces to serve multiple purposes.
“What we’re finding in nearly every client brief is making the space work harder,” Mr Cox said.
“People are really scrutinising their utilisation and how they use spaces, [so we] try to create these spaces that can toggle between being a social space to the informal meeting space to an event space to a fun [space].”
He said MinterEllison, which moved from Allendale Square to Elizabeth Quay, was courageous in its approach to office design.
“[They were] willing to kind of take a bit of a gamble by trading off the impressiveness of their client spaces to give that back to their team,” Mr Cox said.
“[For] a top-tier law firm like MinterEllison, I think [it] was really quite brave and in line with what we’re seeing globally; how our clients are moving more towards sharing … the good environmental aspects, like light, views, planting, [and] comfort.”
Properties & Pathways managing director Cal Doggett, buoyed by confidence in Perth, bought into the office market at a time when other investors were shying away from the asset class.
His company purchased 503 Murray Street for $33.23 million in September last year from Nick Zorzi-led Fairworld Holdings.
The move marked one of the few office transactions in Perth last year.
Properties & Pathways has spent $2 million upgrading the sevenstorey building, with Buildwell Group completing the work earlier this year.
The building was mostly vacant when it changed hands, which meant the Subiaco-based syndicator could carry out construction work largely uninterrupted.
“We always try to be an outfit that doesn’t get caught up in the headlines,” Mr Doggett told Business News.
“We try to look through that and look at the underlying data, which was telling us a pretty compelling story.
“While office worldwide was getting a bad rep … the rental rates for Perth were actually improving, supply was diminishing, and demand was about double what it was pre-COVID.
“We thought if we were going to look through the noise of the headlines, then let the data drive the decision.”
Cal Doggett bought into the office market when few investors were. Photo: Michael O'Brien
Properties & Pathways spent $600,000 upgrading the lobby and entry to the building, incorporating breakout spaces and indoor plants into the entrance.
An external wall visible in the lobby is adorned with a mural of flowers, adding colour to the space.
Properties & Pathways has done a complete refurbishment of the sixth level of the building, transforming an area filled with partitions to an open-plan, external-facing building.
The floor has been turned inside out in the same way MinterEllison’s offices were designed.
“We’ve opened up the floor plate and we’ve used a lot of glazing to let light through, so you can stand at one side of the building and see directly through to the other side,” Mr Doggett said.
“It feels like you’re in a space that has relevance, and it’s not just four walls.
“That was really important, to do that in a cost-effective way; ripping out the old built form and replacing it with a more functional layout, but with a lot more glazing to let the light through.”
Decisive action
Properties & Pathways renamed 503 Murray Street Westend on Murray, to reinforce the recent revitalisation of the western end of Perth and send a message that ownership of the asset had changed.
Mr Doggett said that message was important, given the building’s level of occupation when the company bought it.
“If you see tenants leave a building, it’s really easy to just assume that that building’s no longer relevant, assume it’s bad or it’s a bad landlord,” he said.
“The previous landlords essentially allowed that to happen, because tenants left the building. That’s why it was ninety-four per cent vacant when we acquired it.
“We wanted to really re-engineer that market understanding by spending money on … rebranding it such that the tenant market starts to understand, ‘Okay, well, there are new owners here’.”
Mr Doggett said the previous owners had various plans to improve the building but struggled to come to a consensus.
“They were a syndicate, and the decision making got a bit fragmented for them,” he said.
“They couldn’t really decide what to do and how to do it, how much to spend, and which floor to start with.
“I think you can get a lot of different people saying different things, but you’ve really got to decide on a strategy and then back yourself.
“If you try to be everything, it doesn’t really work.” The company spent about $700,000 on upgrades to the end-of-trip facilities.
This was a scaled-back version of what the former owners wanted to do but felt appropriate for the building, Mr Doggett said.
“We knew we were never going to attract a tenant that wants to be on St Georges Terrace, so why would we spend six million dollars on an end-of-trip refurbishment when our aim was to be the most price advantageous, quality offering with a 6000 postcode,” he said.
“It’s about knowing what we wanted to achieve. It was a targeted approach.”
Properties & Pathways spent about $2 million upgrading 503 Murray Street. Photo: Michael O'Brien
State government agency MyLeave, which administers portable long-service leave for workers in the construction sector, has taken up a lease for the first level in the building and has recently completed its fitout.
Other deals are in the pipeline for the Westend on Murray, which is on track to be more than 60 per cent leased by the first quarter of next year.
Mr Doggett said the level of interest from prospective tenants had increased markedly since the refurbishment was complete.
“We definitely wanted it [leasing] to start a little bit stronger, but what we found was the tenant market was really nervous until such time as we had actually completed the works,” he said.
“There are a lot of landlords in WA and across the country that promise things and then don’t deliver, so we found the tenant market was pretty reluctant. They actually wanted to see the works take place.
“Since the works were complete, in early May, the engagement has been fourfold. We are getting three or four inspections a week.”
The decision to involve tenant representatives early in the process to help gauge what potential occupants wanted had proved a prescient strategy, Mr Doggett said.
As well as making the office like an extension of the home, he said the ease with which workers could commute to and from the office was becoming more important.
“Accessibility to the office itself is really important, particularly when you’ve got a lot of office users embracing a hybrid work-from-home environment,” Mr Doggett said.
“We knew that instead of being in the central part of the CBD, and it takes you fifteen minutes to get to the freeway, we wanted to be on the fringe of the CBD so that you can get on the freeway in either direction in under two minutes.”
He suggested office markets in suburban areas would become more popular, given their proximity to workers’ homes.
This was evidenced in Y Research’s recent study into 1.9 million square metres of office space across 43 suburban office markets in Perth.
The independent study showed that, since 2019, office vacancies in suburban areas of Perth have almost halved, from 18.7 per cent to 9.4 per cent.
Davina Bester (right) and Mike Harvey placed strong emphasis on maximising natural light in the Bankwest fitout. Photo: Michael O’Brien
Charter Hall’s recently complete $85 million refurbishment of Bankwest Place in Raine Square highlights some of the changing needs of lobbies and shared spaces.
Designed by Milieu Creative, led by group general manager Mike Harvey, the space includes a new lobby and mezzanine featuring breakout spaces, a cafe, retail stores, with a focus on connectivity to public spaces outside the building.
Speaking to Business News about the project, Milieu Creative managing director Davina Bester said the project was done in the months following COVID, so had a strong emphasis on bringing people back to the officed after the pandemic.
“The project came into the office in 2019, Charter Hall were looking at reinvigorating the lobby design and space,” she said.
“The conversation started, we probably commenced briefing, and then COVID hit, so the project paused.
“Then when everyone was coming out of COVID, it was like, ‘We need to get people back into the city’; the [occupancy] stats were really low.”
Milieu, which also designed the $100-million-plus fitout for the Mineral Resources headquarters in Osborne Park, sought to add light and colour to the building.
“For all of our projects, we look to follow those principles of maximising natural light,” Ms Bester told Business News.
“This particular space … was very dark previously, so we introduced skylights through the lobby … [and a] summer garden, where the glazing sits across that area on the facade, to try and … bring as much natural light into the space as possible.”
The mezzanine floor includes several breakout spaces where people can work or collaborate with others, while a wellness centre will also be built on that level.
Charter Hall invested $85 million refurbishing Bankwest Place. Photo: Milieu Creative.