Shop space for lease on Auckland's Queen St. Photo / Alex Burton
Shop space for lease on Auckland's Queen St. Photo / Alex Burton
The amount of office space for lease in central Auckland has doubled since before the pandemic, signalling an unprecedented sea-change in the way we work.
It's a clear sign some big businesses are shrinking their traditionally large headquarters in favour of allowing employees to work from home or to adopta hybrid work model, with just some days spent in the office.
Many employers have marked Easter and Anzac weekends as the start of what's being dubbed The Great Hybrid Return. They are staggering employees' returns to the office after a 107-day lockdown, summer holidays and an Omicron outbreak.
But the days of saying "sorry, you're on mute" and wearing trackpants all day aren't over just yet.
Data released exclusively to the Weekend Herald from leading real estate company Colliers NZ reveals vacancy rates of office space in Auckland CBD increased from 4.7 per cent in December 2019 to 10.9 per cent in December 2021. And that's before Omicron took hold of the city.
It is the first hard evidence of the long-suspected downsizing of business in the city.
One company that has ditched office space is Perpetual Guardian. Founder Andrew Barnes - who had already implemented a four-day working week for staff prior to the pandemic - says he has vacated two floors of his Queen St office and plans to reduce his real estate footprint further.
Andrew Barnes, founder of Perpetual Guardian. Photo / Supplied
He says 2022 will be a turning point for Auckland's CDB as business leaders realise they can invest money saved on rent into people and satellite offices.
"It is going to be a hybrid - you will work from home and go to the office to meet and socialise.
"People will meet in the office and work will be done at home."
"I now have just two levels, one floor is the canteen bar area, the other is the main entrance, office and meeting rooms and I'm not sure the meeting room is all that relevant anymore."
AMP Wealth Management decided to downsize its office space in Auckland and Wellington CBDs after the first lockdown in 2020 after a survey of the company's 350 employees showed 70 per cent wanted to work within a hybrid model.
CEO Blair Vernon initiated the "We-Flex" policy after finding productivity and performance was the same or better when people worked from home.
AMP's three-level Auckland office was reduced to one floor and heavily renovated to provide an open collaborative space.
When teams did come into the office it was so they could meet and collaborate - and rows and rows of desks did not provide the right environment, Vernon said.
"One of the benefits for our people is less time and expense commuting and having more time with family and to focus on their own wellbeing.
"We reduced our Auckland CBD office footprint by more than two-thirds, and moved to a contemporary office space purpose-built for collaboration and connection to support productivity, strong client outcomes and workplace wellbeing.
"The move to fully flexible working along with our strong focus on sustainability as a Toitu carbon-neutral certified business has resulted in an 80 per cent decrease in our overall carbon emissions since 2019."
Other big city-based companies spoken to by the Weekend Herald also said they had implemented hybrid working models, including 2degrees and AA Insurance. In Wellington, a number of public service departments were doing the same.
A University of Otago study of more than 2500 people, released after New Zealand's first lockdown, found 89 per cent of people wanted to continue working from home post-lockdown, at least part-time.
But by June, when most restrictions had been lifted, almost the same number of employees had gone back to the office, sparking fears expressed by researcher Paula O'Kane that New Zealand had missed a pandemic reform opportunity.
But the senior lecturer in human resources management told the Weekend Herald business leaders were now realising they would have to offer flexible work to retain staff.
"People are reprioritising the role of work in their lives and you find where organisations aren't offering employees what they want, they're gonna move on and look for an organisation that will."
Restrictions around Covid-19 and the exodus of office workers have heavily impacted the city's hospitality and retail industries. Auckland's Queen St has all but cleared out over the past few months.
But it's good news for suburbia - Retail New Zealand says some centres have seen a rise of up to 15 per cent in sales, with workers popping out of their home offices and into cafes for a coffee or to meet clients and use the free Wi-Fi.
Chris Dibble, head of research at Colliers NZ, said higher-quality buildings with fit-outs that were "fit for purpose" were the most sought-after.
"Open spaces with the right configuration of the workspace that works for collaboration are in demand."
"It's quality and location that companies are looking for."
Dibble said businesses trying to get people back in the office to a C or D grade building were finding it hard because workers were comfortable in their work from home environment.
The figures come as the Herald launches a mini-series called The Great Hybrid Return to Work.
Over the next few days business leaders, cafe and bar owners and mayoral hopefuls share their views on what the flexible work model will mean for the business sector, cities and suburbs.
