Outside the square: the warehouses attracting corporate tenants

Australia /

Once the domain of plucky tech start-ups and vibrant creative agencies, repurposed city fringe warehouses are now appealing to the smartest corporate clients. Providing the opportunity to build a bigger, brighter, smarter work environment within their industrial bones, the possibilities are endless.

Changing the landscape

As manufacturing increasingly automates or moves offshore, we are seeing former industrial sites on the edge of our CBDs lying dormant. Savvy landlords are realizing the potential locked up in these beautiful relics of Australia’s proud industrial heritage and are looking for new ways to unlock that potential.

Corporates are similarly embracing new ways of thinking about how they accommodate employees, aiming higher for inspiring, smart, productive and fun environments, which in turn is driving demand for the possibilities these warehouse spaces present.

Why think bigger?

Michael Greene, Head of Tenant Representation, can see the opportunity for forward-thinking corporations of moving into a warehouse. “It’s generally a large, high, open, airy sort of space, but there’s also a story to tell about creative or adaptive re-use of an existing structure,” he says. “You’ve got a whole environmental angle around reusing something that was already there.”

Moving into an adapted warehouse isn’t just about preserving the historical structure of our cities. There are also solid business advantages that include reducing rental costs, improving use of office space, supporting business growth, promoting greater creativity amongst your workforce and ultimately boosted staff retention levels.

Project director Phylicia Cohen, who focuses on refurbishing these spaces, says that in the last year, CBD rents have increased by as much as 35 percent in some areas, providing a clear business incentive to look a little further afield. This is particularly true if a high percentage of your employees aren’t client facing.

“Many of our corporate clients have a lot of support or back-of-house staff, and they don’t actually need to be in the CBD,” Cohen says. “With the way the rental market is going and the low incentives, it will eventually push a lot of these companies to look to the fringes.”

And they’re not looking too far. CBA will be moving into the Australian Technology Park in Sydney fringe suburb Eveleigh, with several other companies looking at the Bays Precinct. In Melbourne they’re looking at areas like Docklands and Collingwood, or Fortitude Valley in Brisbane. “They aren’t too far to travel and they’ve got good public transport,” Cohen says.

Embracing the blank canvas

The flexibility provided by warehouse spaces offers unlimited potential to build a less traditional corporate environment, encouraging fun at work – an approach that’s key to enticing the best in the business.

“It’s about attracting quality staff,” Cohen says. “It’s a big change in terms of location, but as long as it lies on pubic transport and it’s a fun, funky, flexible working environment with the basic essential requirement to function as a business, they’re happy.”

And the creative adaptions are endless – from low-impact mezzanine floors that do not touch the original structure but provide multiple levels and private meeting rooms to rock-climbing walls, barista stations, ping pong tables, gyms and Dance Evolution games.

Adding these downtime zones isn’t just about having fun. Companies who create these beautiful spaces have employees who are proud to work there and they talk about it.

This is further reinforced by our Human Experience research which found levels of workplace effectiveness to be substantially higher among employees who work in offices with innovative amenities – especially hobby space, childcare facilities and creative areas.

These creative environments can also promote new and successful ways of doing business. “Receptions are becoming more like a Qantas club lounge,” Cohen says. “You come in, there’s a bar, you help yourself to a drink. There’s a lot of automated technology now. You can sign in on an iPad, your contact will get a message and come and greet you. You can have a roving receptionist who can be doing other things. They’re not tied to a front desk anymore.”

Problem Solving

The biggest hurdles presented by moving into an adaptive reuse industrial building are a lack of existing services, according to JLL Project Director Leon Carroll.

“Moving into a warehouse makes sense because you can reduce your rent, get better ROI and you’re not stuck in a standard office block,” he says. “It’s a more agile work space, but there are some challenges, from a design and construction perspective.”

High ceilings and exposed brick walls certainly look great, but they can also mean insulation and air conditioning issues. “The initial design process is all about figuring out what sort of facilities a client needs and making sure that we can translate or adapt this space to suit their purpose,” Caroll says. “And there might be compromises in that.”

The benefits offered to employees in a creative warehouse spaces tend to outweigh the minor challenges presented but they are certainly worth bearing in mind at the design stage.

Greene agrees that the basic building blocks require some lateral thinking. “From a construction point of view, providing the structure is sound, and that’s not always the case, there should be a benefit in terms of your not starting from scratch, but you do have to import a whole lot of modern conveniences – so air conditioning, power, data. That can be a little bit of a struggle, how you do that without ruining the look or feel of the heritage building.”

The basic structure of warehouses also presents specific challenges. “They are long and low and take up a lot of land, so you don’t get the intense use you get from a high rise building,” Greene adds.

So why make the move?

It’s the beauty and flexibility of these spaces that ultimately stacks up. They ensure happy employees, happy landlords with a pattern of long-term leases, and flexibility for nimble employers.

Warehouse spaces not only provide corporates with financial benefits associated with a fringe area but also the opportunity to create truly unique spaces that staff are excited to work in.

Want to know how to transform an industrial space into the perfect office? Drop us a line