5 minute read
Revitalised Shortland & Fort building Standing tall in the era of hybrid working
From a third empty to almost fully leased in only a few months as companies seek high quality space with more amenity close to transport
Much has been said and written over recent months about the potential impacts of hybrid working on the life of CBDs and the offices within them. However, among CBRE’s growing research evidence showing that companies are once again coming back into the Auckland CBD, seeking high quality, amenity-rich spaces as they work to entice employees into the office, one story stands tall.
The revitalised Shortland & Fort office tower (88 Shortland St) is not just a landmark on the skyline at the top of Shortland Street. It has become a beacon of attraction, because within a year the building has seen its vacancy shrink from approximately 30% down to just over 5%, with the potential to be fully leased within weeks.
Over recent months, new leases have been signed across multiple floors of the building at 88 Shortland Street to an exciting mix of highly regarded organisations. Exclusive agents Matt Hockey and Chad Crenfeldt-Smith of CBRE New Zealand emphasis the creation of a new connection to Fort Street with an award-winning lobby. This also included upgraded amenities and new shared facilitiesincluding market-leading cyclist and end-of-trip facilities, an upgraded gym exclusively for building occupiers, refurbished conference centre facilities, and refurbished Ara Eatery café with an outdoor terrace.
As well as proximity to public transport attracting companies seeking to entice employees to work in higher quality buildings and workspaces in a competitive people market, as tenants can see how they can attract people back into the office and retain staff here. We fully expect the building to be 100% leased in 2023, because we have seen a major expansion of professional and financial services footprints in this building driven by staff retention and recruitment.
“The office is alive and well – and particularly high quality and refurbished buildings such as Shortland & Fort, which underwent a $20m revitalisation programme in 2021. All the new occupiers have come from lesser quality buildings, seeking more and better amenity space for staff to enjoy, drawing them back in to the office.”
Increasingly, office occupiers are focusing more on providing amenity to draw people in – providing additional benefits to employees in return for the time lost in commuting. The building owner, Deka, is particularly excited to welcome tenants to use the new lobby, café, outdoor deck area and level 8 business centre, all of which provide amenity that companies do not need to incorporate into their own tenancy. Many tenants are using the facilities in the building to get into a smaller footprint, using the complimentary meeting rooms in the business centre, which prompts them to consider whether they need these facilities in their own offices.
“Another big attraction for companies locating in Shortland & Fort is the building’s proximity to public transport links, which backs up CBRE’s most recent Live Work Shop research. Britomart’s train station entrance is only just over 160 metres from the new Shortland & Fort entrance on Fort Street. We are certain that this building and location will only attract more attention ahead of the City Rail Link opening, as more people and organisations realise how it has improved commuter convenience.”
Fusion5 Country Managers Kristy Brown and Becky Rutherford echo the importance of highly quality spaces for their team. “We know people can be effective working from home, so we wanted to create a space that promotes collaboration and experiences they cannot get from within their home environment, and Shortland & Fort’s offering fits the bill. Our people are our biggest asset, and we were not willing to compromise when it comes to the standards and facilities we provide our team into the future.”
This follows the news in 2021 that a number of organisations took space in the building. A total of 1,960sqm was leased to leading New Zealand law firm Tompkins Wake, business advisors and chartered accountants Walker Wayland, and a New Zealand government department, across levels 17 and 14 respectively.
CBRE’s Live Work Shop report highlighted a number of major trends among occupier of corporate real estate, including:
Working environment now tops the agenda
The quality of the working environment is more important to people than ever before. Around two-thirds of respondents place a higher value on the quality of the working environment than prior to the pandemic. The continuing shift toward hybrid working can strengthen the premium placed on the quality of the working environment.
Office amenities must improve the employee experience
Among internal elements, environmental features such as natural light and better air quality rank highly, along with dedicated space for focused work, and design and aesthetics.
Advanced office technologies such as personalised lighting are also important, along with systems that help in locating colleagues and teammates. Although wellness features are highly valued, as are COVID-19 safety measures, conveniences such as on-site hotel accommodation or day-care facilities are accorded lower priority.
Location decisions and micro-market characteristics are vital
Other external factors also affect workers’ inclination to visit the office, but not uniformly. Accessibility to public transport, quality of overall location in terms of proximity to retail and hospitality, and availability of car parking all play a role, although commute time remains by far and away the most important consideration.
With millennials and Gen Z more concerned about quality of location than older workers, occupiers will need to carefully consider locations that can encourage workers to visit.
Easing commute time is key to improving office utilisation
Tolerance of long commutes is dropping sharply, with respondents naming it as their second most important job selection factor amid a widespread wish to spend much less time traveling to and from work. Three-quarters of respondents want a one-way commute time of no more than 30 minutes, but only 57% currently have one. Conversely, the tolerance to commute for more than 30 minutes in the future is much lower than current levels.
The survey also found that commute time is so important that it affects perceptions of the working environment. Workers with short commutes are more likely to be satisfied with the quality of their office, including internal amenities, than those with longer commutes.
It therefore follows that when making decisions about location and design, landlords and occupiers should pay at least as much attention to travel patterns and the burden of commuting as they do to amenities and design features. Ultimately this could be critical to optimizing employee satisfaction
Zoltan Moricz, Executive Director Research at CBRE New Zealand says that hybrid working and more flexible work arrangements are having less of an impact on space demand than many have thought or feared in the past few years. “High quality workplaces can help bring employees back to the office, attract new talent, improve company culture and community, and increase sustainability credentials.”
Hockey says that there are two remaining spaces in Shortland & Fort that he and Crenfeldt-Smith are marketing to prospective tenants: a 650sqm part of level 17, which is already attracting interest, and a 383sqm fully fitted suite on level 15.
Recent Leases:
Level 19 and 20:
–Award-winning business solutions company Fusion5 has signed a lease to occupy part of level 19 and all level 20 from September this year. Previously located nearby on Shortland Street, business expansion and a desire to occupy premium grade space has driven the move.
–Swire Shipping has leased Part level 19, commencing April 2023, executing a project to reduce their sqm footprint and obtain a superior quality offering on a single floor.
Level 18:
–Approx 1,300sqm was leased early in 2022 to Paymark, who moved from 1,700sqm at 162 Victoria Street into a smaller footprint in a better quality office and location at Shortland & Fort.
Level 15:
–Ocean Network Express is set to occupy a 325sqm custom-fitted tenancy provided by the landlord, global real estate investor Deka Immobilien. An existing tenant has also expanded its space by taking an additional 344sqm of space via a similar custom-fitted tenancy, as has Younity, a leading recruitment firm, which has signed to occupy a 253sqm custom-fitted tenancy, moving from a mid-city location.
Award-Winning Building
Shortland & Fort also recently won three significant awards:
NZIA 2022 Auckland branch Architecture Awards winners: Small Project Architecture
RICS Awards 2022 New Zealand: Property/Facilities Management Team of the Year
New Zealand Design Awards: Refurbished spaces - Gold
