Christchurch leading the country in the return to office-based working

Christchurch office workers are spending more time in the office than their counterparts in Auckland and Wellington, according to CBRE’s 2024 New Zealand Office Occupier Sentiment Survey Report.

As the post-Covid hybrid working model (where staff split their time between office-based and remote working) becomes the norm, Christchurch is leading the return to the office nationally. 

Responses from 160 professionals representing 18 industry sectors showed that days spent in the office per week are the highest in Christchurch, at 3.8 days, compared with Wellington (3.3 days) and Auckland (3 days).

Across the three main centres, the average office utilisation rate (the percentage of office space occupied during a typical week) is 62% in 2024, up from 59% last year.

Mitchell Wallace, Associate Director of Office Leasing at CBRE, says that while the other major centres still have work ahead of them in attracting staff back to the office, Christchurch occupiers have largely succeeded in achieving good office-based working rates. However, hybrid working is clearly here to stay.

“Although nearly two thirds of survey respondents indicated that their current hybrid working practices probably won’t change, it’s widely accepted that spending more days in the office is good for workplace culture, as well as contributing to a more vibrant CBD,” he says. 

“With our high quality office stock, excellent CBD amenities and comparatively easy commuting, it’s no surprise that Christchurch is leading the country in terms of office-based working.”

The survey also shows that employers are adjusting their hybrid working models towards encouraging employees to spend more time working in the office. As well as workplace culture, respondents noted several other benefits of office-based working, including better collaboration and more mentoring & support opportunities.

58% of organisations have made changes to their workplace design as a result of hybrid working, compared with 52% last year, says Wallace.

“Employers are recognising that in order to encourage a more widespread return to the office, providing attractive workplace environments and fostering a great team culture is crucial. Workplace design has therefore featured prominently in employers’ responses to new ways of working.”

Relocation is another widely pursued strategy, with 39% of organisations nationally planning to relocate their office premises. In contrast, only 12% are planning to stay put and renegotiate their leases. 

The most common reason for relocation is to upgrade to better quality offices that will encourage staff to spend more time in the office. Other reasons include seismic and sustainability concerns, as well as being closer to better amenities and public transport. Four out of five respondents say proximity to public transport is a high priority for their office location.

“Geographic location was the top consideration for Christchurch businesses, with 89% of respondents rating it as a priority. This is aligned with the current high demand among tenants for office space in the CBD,” Wallace says.

“It also backs up anecdotal evidence that Christchurch office-based employees like working in the CBD, which is obvious when you consider how much more vibrant and busy our central city retail and office precinct has become in the past few years.”

A net 15% of Christchurch occupiers are also expecting to increase their office footprint over the next two to three years, indicating a positive outlook for the office market and the city as a whole, he adds.

With hybrid working now standard practice, CBRE is advising occupiers to reassess their workplace strategies to ensure they align with business goals. This includes evaluating how space is used when employees are in the office, says Kirstin Cooper, CBRE Associate Director of Workplace Consulting.

“As businesses transitioned back to the office post-Covid, there was a significant shift towards providing more space for collaboration. It was initially believed that employees would return primarily to connect and work with others. However, four years on it’s clear that space usage is often more complex and while employees do come in for collaboration, their days are not solely focused on it.” 

With many businesses indicating a desire to relocate to help in attracting more people to the office, occupiers are advised to engage an office leasing specialist early to assist with any relocation plans, says Wallace.

“Extremely low vacancy in the prime Christchurch CBD office market means it’s important to start searching for new premises at least 12 months before a lease expiry. Even with several new office developments and refurbishments entering the CBD market in the near future, tenants are still advised to act early to secure space now as there is still very high demand and competition in the market.”

Prime office property in the core CBD precinct (roughly bordered by Kilmore, Madras, Lichfield and Durham Streets) has just 0.7% vacancy (as at June 2024). Prime vacancy in the West End precinct is 1.7%, according to CBRE Research.