How office landlords are fighting to secure tenants

Just as employers are dreaming up perks to lure staff back into the office, office landlords are offering incentives to attract businesses to their premises.

Ray White Commercial Head of Research Vanessa Rader said the incentives range from drinks and discount food to pilates sessions and special events, and have proved effective.

“Post COVID-19 we have seen an increase by institutional owners to create sub-communities within their office buildings, growing their offerings from concierge services to entertainment events, working with tenants (as well as local food retailers) and their employees to grow vibrancy in their workplace and within their buildings, reducing the threat of relocation or sublease,” she said.

Landlords grappling with WFH trend

Zooming out from the office market to the broader leasing market, Ms Rader said landlord incentives had produced mixed results.

“Relocating tenants continue to grapple with their space use requirements, often opting for smaller or the same size accommodation options, happy to allow for growth via work from home,” she said.

“Sublease continues to be a contributing factor to the overall vacancy environment, with banks, legal and technology users just some of the tenants handing back space.”

Ms Rader said the low unemployment rate – just 3.5% in February – was one reason why landlords were still finding it hard to fill their properties.

Employers have been forced to offer more flexibility to staff, with many choosing to work from home or vary their start and finish times.

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