Big technology companies are leasing out surplus office space – enough to accommodate 6500 to 8000 staff nationally – as companies such as Atlassian and Salesforce rapidly reassess their workplace requirements.
The volume of sublease space available within tech sector properties has risen to 64,900 square metres, compared with 29,200 square metres a year ago, according to analysis by commercial agency CBRE.
Part of Tyro’s office space in Market Street, Sydney, is open for subletting.
“The struggle for these tenants to attract staff back to the office has been one factor, although more recently, it has been more of a function of cost-cutting, particularly for US-headquartered firms,” CBRE’s Mark Curtain said.
While the number of tech sector sublease availabilities more than doubled, professional services firms and banks’ sublease availabilities decreased by 51 per cent and 18 per cent respectively. As of June, the banks and insurance sector only had slightly more availabilities – about 76,000 square metres – than the tech sector.
Mr Curtain said companies outside the tech sector have rolled out “more assertive return-to-office plans”, which was why they were experiencing lower sublease numbers.
The tech sector’s recent subleasing increase has been most felt in Sydney – where many of these companies have offices – which has had a 25 per cent uptick overall in subleasing since the start of the year. This led to Sydney’s subleasing availability growing to about 125,000 square metres, an increase of 27,700 square metres from last year, the CBRE report said.
Outside Sydney, the trajectory of other capital cities’ subleasing availabilities decreased or remained steady due to less of a tech presence and a stronger return to office. Nationally, this led to a decrease of 7000 square metres in sublease availability from last year.
Atlassian is searching for sub-tenants at five floors of its 341 George Street office in Sydney. The tech giant’s “team anywhere” work policy and cost-cutting measures were reasons why parts of its office were open for sub-letting, CBRE Sydney office leasing director Chris Fisher said.
Payments company Tyro is subleasing out two floors at its Market Street office. Chief executive Jon Davey said the company was reducing its office space from six to four floors as it focused on being more efficient in a hybrid working environment.
“We’re lucky to have a vibrant and unique office space that’s designed to drive innovation, allowing our teams to easily collaborate and video conference with colleagues based at home, our offices in Melbourne and Bendigo,” Mr Davey said.
NTT is also leasing out part of its Darling Park office, while Salesforce is subletting across two buildings. Salesforce is looking for sub-tenants at the Salesforce Tower as well as for a floor at the St Hilliers building in Sydney.
“For Salesforce [Tower], it’s not surplus space, but it’s space they had land-banked but are now trying to get rid of,” Mr Fisher said. “These tech companies have grown exponentially in the past few years, so their layoffs are a blip compared to the growth they’ve had for the past few years.”
The St Hilliers office space, meanwhile, was previously used by Tableau. But after Tableau was acquired by Salesforce, its staff moved to the Salesforce Tower.
Turmoil in the tech sector that started last year remains, as rising rates have forced company founders to make tough calls about cutting costs and raising capital.
It has already emerged that companies such as Atlassian and Canva were trying to shift their workplace cultures to include tougher performance management metrics. In line with tighter times across the tech sector, both have introduced five-point ranking systems that are likely to see more employees classed as underachievers.
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