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Canadian investment giant Brookfield Asset Management is bucking the trend when it comes to hybrid work in a post-pandemic world.
In the Asia-Pacific headquarters of the world’s second-biggest office landlord in COVID-safe Sydney, 90 per cent of staff have been coming in for close to a year, according to Sophie Fallman, managing partner and head of Australia real estate. The firm also has all staff back in its downtown Manhattan office tower, with the exception of those on maternity leave or with special circumstances.
Fallman is betting that office life isn’t dying any time soon, echoing sentiments from Brookfield Chief Executive Officer Bruce Flatt, who has said he’s planning to add to his US$210 billion real estate portfolio.
“We are an office-based culture, it’s best when we are together,” Fallman said in an interview. “It’s a value known and understood throughout our firm. That doesn’t mean people don’t realize that everyone has a life outside the firm, we’re all adults about it.”
It’s a very different scenario from many workplaces globally and even in Australia, where strict early lockdowns have kept the virus at bay while allowing for the opening of most big cities. Wall Street banks have spent the past few months grappling with how to get workers back into the office. Goldman Sachs Group Inc. is mandating staff at its Manhattan headquarters report to their desks while others such as Citigroup Inc. are allowing for a slower return and promising a mix between home and office longer term.
Fallman said most people want to go back to the office and it’s a question of employers offering something different. She expects a move away from the tendency to pack people into dense spaces. Brookfield’s new office in Sydney, for example, allows for one person every 15 square meters (161 square feet), compared with 11 square meters in its old location. It also has additional meeting spaces with screens and individual pods for coffee breaks.
The 27-storey, A$2 billion (US$1.5 billion) building on top of one of Sydney’s busiest train stations has a piano in the foyer, and some of Brookfield’s private equity executives have taken turns to play since the company moved in late May. “People want to go to an office that’s amenitized and engaging,” Fallman said.
The tower counts Australia’s third-biggest bank, National Australia Bank, as the anchor tenant, and boasts two levels of retail space. It also offers an app through which occupants can keep up with events and get free coffee.
Fallman’s not worried about the future of commercial property, even as banks including National Australia, Citigroup and Standard Chartered Plc move to trim space in the region.
“We are seeing really strong demand for office space in high-quality buildings such as Brookfield Place Sydney,” Fallman said. “Law firms, insurance firms, financial services more broadly are looking for space, and also there’s an uptick in demand from big tech firms. The market is bifurcating and there is a flight to quality.” She said Brookfield is ready to make opportunistic acquisitions in the market.
While office occupancy rates are hovering at about 70 per cent in Sydney, higher than National Australia’s average rate of 42 per cent, Fallman says the numbers are generally starting to improve -- just not on Fridays and Mondays.