Office workers feel the squeeze

19:18, Oct 28 2014
office worker
'OCCUPATIONAL DENSITY': Workers have less space because businesses are trying to make the floorspace they rent more economic.

We are all working a little closer together as employers cram in more desks to save on costs, a new survey on workplace layouts suggests.

Colliers International latest workplace report shows there has been a significant increase in "occupational density" in New Zealand central city workplaces over the last two years.

Between August 2012 and July this year, the survey found that CBD office workstations were taking up 16.4 square metres, compared to 17.1sq m previously.

Alan McMahon, Collier's research director, said workers had less space because businesses were trying to make the floorspace they rented more economic.

The biggest savings were seen in Wellington's public sector, where workstation space had shrunk from 17.2sq m per workstation to 13.4m2.

As a result, the public service had slashed its total occupancy costs by about 40 per cent, from $7450 to $4450 per workstation.

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However, there was quite a lot of variance between locations, sectors and quality of buildings.

In Auckland, worker space had reduced only slightly, from 16.8sq m per workstation to 16.6sq m.

But if legal firms, which tended to have a higher number of private offices, were excluded, the density was much greater at 14.8sq m, a drop of 10 per cent.

"This is one of the largest increases in density we have recorded in such a short space of time since our survey began in 1998," McMahon said.

This situation was working in tenants' favour because Auckland rents had not risen much, he said.

But it would not last forever, with rents for prime Auckland CBD office space forecast to rise between 5 per cent and 6 per cent over the next couple of years.

McMahon said businesses in Christchurch would also be under pressure to reduce their worker footprint because rents there had risen 30 per cent.

People's workstation space would have to shrink from 20.6sq m to 14.4sq m for business to pay the same rent that they did before the earthquakes, he said.

However, using large floor plates efficiently in new buildings was a key to making the CBD affordable enough to draw tenants back.

"It is feasible for tenants to incur similar cost per person while paying the higher rents that are required to trigger construction."

McMahon said there was also a lesson for landlords in the survey. Lower grade B and C grade buildings was often constrained when it came to density because of the design of facilities like lifts, air conditioning and the number of toilets.

Newer buildings not only provided more efficient floorplans but superior facilities, and landlords of poorer buildings were finding it harder to attract tenants.

"If you squash people in without providing better services, it doesn't really work," McMahon said.

The survey covered more than 186,000sq m and 11,370 employees.

FACT BOX

How much our offices have shrunk
                 2014        2012
Auckland   16.6sq m   16.8sq m
Wellington 16.4sqm    17.5sqm
(Christchurch was omitted because of earthquake damage)

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