Over the past 18 months, the term “flight to quality” is as true as it is overused. This is no surprise as tenants will undoubtedly seek a higher quality space or building grade to efficiently run their business and attract and retain staff. However, it is a common misconception, to think this means lower building grades will suffer in demand. Not all businesses have the desire nor ability to pay premium-grade rents.
To gain some perspective, we asked Peter Biazos, Director of B & T Advisory a few simple questions on how his business operations may have changed or been affected by the taking on a higher quality office accommodation. For context, Peter had been operating out of a 134 sqm inefficient existing fit-out on level 4 in 26 Wharf Street into a brand new 125 sqm spec fit-out on level 19 in 144 Edward Street. As of this article being posted, he has spent just over 8 months in his new office.
- Why did you decide to relocate over renew?
Our previous tenancy within 26 Wharf Street had become aged and disorganised. I wanted to ensure our new tenancy was attractive and vibrant and would assist in attracting new and prospective employees into the business to help supplement business growth.
- How have your staff responded to the new office?
My staff enjoy the breakout facilities and use them daily. I have noticed they tend to come into the office more often and enjoy the nearby surroundings and amenities that Edward Street has to offer. They additionally feel more organised with regular use of our new boardroom in the mornings to plan out the day.
- How have your clients responded to your new office?
Our clients have responded positively to our new tenancy and location. The new space has allowed us to have numerous events in the boardroom including breakfasts, presentations, and seminars, which we could not do at Wharf Street. The new tenancy has illustrated my business’s growth and reflects our strong position with our clients.
- What would your advice be for a business’s considering making the move within the CBD?
Make the decision, look at your options and move!
Whilst the above is only a single recount of one tenant’s experience and not enough evidence to substantiate that the “Flight to Quality” has worked or had positive outcomes for all tenants that made a move over the past 18 months. The generally positive response provides confidence that other tenants that had made similar decisions may also be reaping more positive outcomes than negative ones.
To reflect briefly on some of the answers provided by Peter, it is evident that he has achieved his initial goal of attracting staff back into the office and ensuring the space can be utilised efficiently and effectively in a variety of ways. One interesting takeaway is that although Peter downsized from his previous office, he now feels there is greater space to work in, which is almost certainly attributed to the well-thought-out and built newer efficient fit-out layout.
If you too would like to see how your business may benefit by moving to a newer/ more efficient fit-out or building, please feel free to contact Patrick Lindores or any of the experienced Caden leasing team.