AFR Article: Tuesday 22 June 2021. Page 30

Office workers in Australia’s two largest cities are not the most cramped in the world, but they are tighter than the global average, putting employers and landlords under greater pressure than others to spread people out in a post-COVID-19 environment, a new report by JLL shows.

Sydney’s white-collar workforce has an average office density of 11.1sq m per person and Melbourne 12sq m, making them more densely crowded than the global average of 13.3sq m, according to the Benchmarking Cities and Real Estate report.

They are not the tightest of office environments – call centre-heavy Manila has that distinction, with an average density of just 6.9sq m per person – but at a time when owners and users of office environments face pressure to reconfigure their space to attract staff and keep them engaged, Sydney and Melbourne are not immune.

‘‘Occupational densities will be part of a widening suite of dynamic ‘metrics that matter’, including those measuring human experience, which businesses and the cities they are housed in will increasingly need to access,’’ said Victoria Mejevitch, head of JLL’s Global Benchmarking Services.

The least-dense offices in the report are in Chicago, with an average density, based on occupied usable floor area, of 22.8sq m per person, followed by Los Angeles with 20.9sq m and Munich with 18.9sq m. New York was the densest US city, with an average 16sq m per person.

Density is not everything, however. Office costs matter, too. Some locations with the densest offices such as Hong Kong (9.1sq m per person) and London (9.8sq m) are constrained in the extent to which they can reduce density because of their high costs – more than $US2000 per square metre each.

Cities with low densities face little impetus to de-densify further, and in New York, with prices close to Hong Kong’s average $US2500 ($2672) per sq m, the pressure not to reduce density any further will be great.

Sydney and Melbourne, by contrast, are in a group of cities with average office costs around the $US1000 per sq m mark (sub-$US1000 for Sydney and closer to $US500 for Melbourne) and can more afford to de-densify because of their comparatively low office costs, the report says.

‘‘There is another group of cities, however, with comparatively tight densities but where relatively lower space costs mean that the opportunity cost of de-densification may be more compelling – Singapore, Sydney, Melbourne, Toronto, Paris, Milan and Madrid,’’ the report says.

It was a consideration for Australian landlords and employers, JLL Australia chief executive Stephen Conry said.

‘‘We have already seen social distancing protocols exerting upward pressure on workspace ratios and companies rethinking the configuration of their office space,’’ Mr Conry said.

‘‘The emphasis has been on creating productive work spaces that have a high standard of health and wellness.’’

Some sectors, such as technology, will be better able to reduce density and work remotely than others, such as healthcare and the legal industry, it says.