_End of Trip facilities: Trends and transformations
According to the latest Knight Frank Melbourne CBD Office Market Overview report, the recent record low vacancy rate caused by strong tenants’ demand and limited supply is expected to remain tight through the second half of 2019.
However, Melbourne is on the cusp of a new wave of development completions, with the city expected to account for the bulk of all new supply nationally over the coming years. The first wave of new stock is due to hit the market in 2020. It is anticipated that as tenants move into these new commercial developments that the resulting backfill space will cause an uplift in vacancy to more traditional levels.
As we see this surge of new development, we are also seeing the focus on lifestyle and wellness continue to drive commercial building owners to provide bigger and better facilities in their assets. This trend is predominantly driven by occupier demand, with pressure being put on businesses to supply increased levels of amenity for their staff.
With our love of active pursuits and desire to strike a healthy work-life balance, many Australians have come to rely on End of Trip facilities at their workplace. These facilities are now expected to be provided in most office buildings around the world, offering changing rooms, towel service, showers, lockers and secure bike parking for the building users who not only cycle, run or walk to work or participate in sport at lunchtime, but also want to transition into the after work environment of our cities.
Image: “ONE”, 101 Collins Street, Melbourne
The benchmark standard for these types of facilities has leapt in the last few years, from a few showers and bike racks in the basement to premium offerings of marble-clad dressing rooms, personal grooming stations and yoga studios.
Today’s End of Trip facilities are a future-proofing strategy for owners to retain tenants and secure new ones, while helping tenants to remain at the forefront of workplace health and wellness. By encouraging their staff to embrace healthy living, the tenants benefit through lower absenteeism, improved staff retention and increased productivity. Enabling wellness is now part of an active business strategy for most corporates.
However, it is not just the new buildings that are benefitting from these facilities. As End of Trip facilities increasingly become an expected feature in new builds, landlords of older assets are improving their competitiveness in the leasing market by installing premium level of facilities too.
Image: “ONE”, 101 Collins Street, Melbourne
In the last few years, Knight Frank Project Management & Building Consultancy have delivered over 15 End of Trip facility refurbishment projects across Australia, for clients such as AXA Investment Managers, GIC & Charter Hall and AMP Capital.
In this time, we have seen an increased number of owners reclaiming car park space to create larger End of Trip facilities – a move which is supported by councils.
Melbourne’s iconic 101 Collins Street was one of the first to position its place in the market with the new standard in End of Trip Facilities. Last year, after reclaiming an area that once housed close to 50 car parks, Knight Frank Project Management & Building Consultancy (“PMBC”) delivered “ONE”; the multi-million-dollar End of Trip upgrade for AXA Investment Managers, which offers a resort-style spa and hotel experience for tenants and is widely regarded as a global benchmark.
These premium facilities include 500 bicycle racks, 500 lockers, drying rooms for damp clothing, 45 luxurious showers, bathroom facilities (including accessible facilities) and a new entrance allowing for direct entry, alleviating any interaction with cars and the very busy building loading dock. This refurbishment has resulted in a 225% increase in the use of the new facility. The feedback from the building users is of course hugely positive.
Image: Renders of “RISE”, 101 Collins Street, Melbourne
The End of Trip facility is located adjacent to a new state-of-the-art holistic wellness centre, also being delivered by Knight Frank PMBC. As of late October, 101 Collins Street’s 4,200 tenants will have access to “RISE”, which will offer yoga, pilates, barre, boxing, TRX strength training, and HIIT, alongside physiotherapy, osteopathy, remedial massage, and nutritional advice. AXA Real Assets Head of Funds Management Brett Dillon says the service is the first of its type in Australia, where the trend of offering higher class facilities is emerging.
Image: “Chifley Lifestyle”, Chifley Tower, 2 Chifley Square, Sydney
Sydney’s Chifley Tower is another example of the End of Trip concept evolving, with “Chifley Lifestyle” opening in August this year. Knight Frank PMBC were appointed by GIC and Charter Hall to deliver the $6.5 million major revamp of the existing facilities, creating a space that sustains active bodies, busy lives and a healthy work-life balance.
The experience of Chifley Lifestyle is now closer to an exclusive day spa, with priority put on a luxurious, premium feel, exquisitely detailed using opulent materials. These 7-star service facilities include speed showers, full 360 vanity stations with top and front lighting to eliminate shadowing, and clever biofilic feature lights that simulate natural daylight in this underground space. Usage of the facilities has doubled in the two months since opening.
Image: “Chifley Lifestyle”, Chifley Tower, 2 Chifley Square, Sydney
As it stands, Australia is leading the charge on shaping what a modern business lifestyle looks like. While “wellness in the workplace” is still in its infancy, at Knight Frank we use our insights, data, local knowledge and global experience to contribute to how this trend will evolve in the future, by understanding the role that commercial building owners and occupiers will play in shaping this transformation.
We look forward to continuing our partnership with our clients to deliver premium products and at the same time change the Australian market, one building at a time.
For further information please contact:
Paul Kennedy
Partner, Head of Project Management & Building Consultancy, VIC
Paul.Kennedy@au.knightfrank.com