Public sector should revisit its property strategy, says expert

29 July 2020 5 min. read

In an environment of significant workforce change and a greater reliance on virtual working conditions, should government departments revise their property needs to adjust to this shift in workforce practices?

Stephen Oxford, an expert in Synergy Group’s Property Advisory practice, says now, more than ever, is the time for public sector enterprises to revisit the way they manage and plan for new property leases. He suggests there are a series of core factors that property teams should consider so they end up with a for a fit-for-purpose lease.

And a side benefit? It may result in Commonwealth savings along the way.

Occupancy statistics

The 2019 edition of the Australian Government Occupancy Report shows that the Commonwealth leases 2.83 million square metres of office space. This floor space includes 164,632 work points – around the same number as reported a decade ago. 

“According to the report, the average occupational density in 2019 was 16.1 m2 per occupied work point, which hasn’t changed much over the years,” explains Stephen. “About 29 per cent of tenancies met the density target of 14m2.”

Stephen says now is the time to rethink the reality of these statistics – but at department and agency levels.

Public sector should revisit its property strategy, say expert

“Each year, the occupancy report tells us there are thousands of vacant desks,” says Stephen. “To gain greater efficiencies, it’s time to support better entity-level planning, incorporating a thorough understanding of workforce requirements, so property managers are well informed on what they need before approaching the market.” 

Stephen also says that entities need to start this process much earlier to provide a broader array of leasing options. Too often, a last-minute approach to market results in limited choices, which ultimately impacts an entity’s ability to achieve value for money.

A collaborative methodology

If agencies take a ‘user needs’ mindset, they can uncover a better leasing solution. “Some agencies are doing this really well – they’re talking with staff and defining their requirements – then achieving great leasing outcomes that will support their workforce by providing for their long-term needs,” explains Stephen. 

“We have seen some entities reduce their requirements significantly by doing this well, resulting in their property team going to market for 12,000 m2 instead of 18,000 m2 and millions of dollars’ worth of savings.” 

Stephen encourages agencies to understand how people work – to know how much time their staff spend at desks, at home, on the road, in meetings, or with others brainstorming ideas. This knowledge can then be combined with other data to create a fit-for-use solution. “You really can’t do an accommodation plan without a workforce plan and an overarching corporate strategy,” says Stephen. “The goals or plans for the business determine if the workforce is likely to grow or contract, and this affects your property needs.” 

Size matters

While Stephen is supportive of the tactical goals of the government’s ‘Property Management Framework’, he would like to see agencies reflect on actual density targets based on their particular office requirements. “Allowing 16 m2 per person is arguably twice as much as what the private sector would allow – modern workplaces provide significantly less yet still meet social distancing requirements.

“To gain greater efficiencies, it’s time to support better entity-level planning, incorporating a thorough understanding of workforce requirements.”
– Stephen Oxford, Executive Director at Synergy Group

“For instance, when you walk into the Commonwealth Bank building in Sydney, it’s a modern mix of booths, furniture, reading spaces, amazing technology and video conferencing capabilities, and stand-up meeting zones for workshopping. The diversity of spaces aims to address the different ways people work. It isn’t a sea of workstations yet it’s still an efficient use of space.” 

“The private sector offices we see are typically three times more efficient than similar public sector offices and they are vibrant beautiful spaces – it’s the public sector workforce that is missing out.” 

Go forward, not backward

If anything, Covid-19 has demonstrated to public servants at all levels that productivity is possible in less traditional office environments.

“The way we worked 20 years ago with a computer and desk phone has changed. For many, there is nothing tying someone to a desk these days and the way we work could be done anywhere,” says Stephen. “Covid-19 has proven that this workplace evolution applies to the public sector as well.” 

Stephen believes the way the Australian Government manages its occupancy footprint could become a case study for other countries if each enterprise takes a more strategic planning approach – with the user at the heart of it. 

Core considerations

Stephen’s key suggestions in addition to the tactical recommendations within the Property Management Framework? “Never just replicate what you have now – reassess needs at each lease renewal. Allow enough time to understand your agency’s needs. Tie your property planning in with workforce planning. And don’t make assumptions about what people need to do their job – consult with staff.”

“Let’s not go back to how it has always been done. With more people productively working from home and embracing technology, we have an opportunity to plan for a different footprint. It’s up to each agency to accurately define its requirements before approaching the market.”