As society continues to blur the line between work and play with flexible working arrangements, ‘hot-desking’ and networking outside of the office, it presents an opportunity for the retail sector.
According the latest JLL report entitled ‘A Retailers Guide to the Galaxy’, mixed use premises are an emerging trend that will have foreseeable benefits for retail investors in the next 10 to 15 years.
Employers are increasingly mixing business with pleasure, adapting workspaces to include coffee shops with professional baristas and beer taps with bartenders, according to the report.
According to Abigail Campion, National Placemaking and Customer Experience Manager at JLL, “by the year 2020, it is likely that all buildings in advanced economies will be required to have achieved sustainability ratings.”
The sustainability concept has broadened to mean creating ‘places’ where people enjoy working & living. The ‘war for talent’ continues to impact where companies choose to locate their office while flexible working arrangements mean employers need to work harder to make the office an appealing place to work. Campion says that, as a result, “existing buildings will need to compete with new developments designed with green spaces, good air quality and spaces for social gatherings.
“A great Lobby space that has a mix of retail with cafes, restaurants or business lounges, offering entertainment and a great social life is likely to remain appealing.”
But, some office spaces go even further. The office tower on 1 Market Street, Sydney, goes so far as to feature a ‘secret garden’ which attracts people working within the building as well as nearby workers who grab a coffee from the indoor/outdoor café and spend some time there with a good book on their lunch break.
Similarly, the report states that in Westfield San Francisco, the owners dedicated an unused portion of the fourth floor as a co-working space for retail tech startups. Branded ‘Bespoke’ the new office sector drove an estimated additional 100,000 shoppers through its doors in its first year.
The future of the office employee has much to say about how businesses utilise space in the future. According to KPMG demographer Dr Bernard Salt, the future of work over the next 10 years is “fluid and mobile” – and businesses – certainly investors – will need to respond to that.
“You might come into the office work two days, and spend three days in a sea change or tree change environment… Or work will be fluid and mobile, where people will time shift.”
“So you might have someone working two hours between 9 and 11 am, then two hours between 9 and 11pm and then maybe working between 1 and 3 pm… This will be idea for 30-something women largely responsible for managing a family,” Dr Salt said.
Campion says the merger of work and play represents valuable opportunities for retail investors.
“These ‘blurring of lines’ will have a medium impact on shopping centres, restaurants, bars and office buildings over the next decade.
“Retail investors will need to be mindful and aware of the potential for changing work attitudes in the next decade as well as this movement towards a fluid and flexible workplace.”
“It is also important to recognise emerging opportunities within office spaces or mixed use premises as this is a growing trend that reflects changing customer needs,” Campion says.
With changing lifestyle needs and work practices, there are medium term opportunities for retail investors to tap into the workplace psyche and provide a retail value offering that ensures customer loyalty, repeat business and profitable growth.
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